Administration of Stamp Duty in Nigeria

Introduction:

Stamp duty is a tax levied on physical and electronic instruments listed in the Schedule to the Stamp Duties Act (as amended). Some of such instruments include Receipts, Agreements, Contracts, etc. Instruments executed in Nigeria are required to be stamped on or before execution, however, a grace of 40 days from the first execution is provided; while unstamped or in- sufficiently stamped instruments first executed outside Nigeria should be stamped within thirty days after it is first received in Nigeria.

 The Federal Inland Revenue Service (FIRS) is the competent authority to impose, charge and collect duties on instruments executed between a company and an individual, group, or body of individuals; while the state tax authority covers instruments executed between individuals.

Stamp duty may be imposed at a fixed or ad-valorem rate. The rate is fixed when a specific amount is provided by law, and it is ad-valorem when the law only provides a percentage to be applied to the consideration sum.

An Electronic Money Transfer Levy of N50 is imposed on all electronic receipts or transfer of N10,000 or more.

Persons liable to penalty upon failure to stamp:

No.Tile of Instrument as described in the SchedulePerson liable to penalty
 Bond, covenant, or instrument of any kind whatsoeverThe obligee, covenantee or other person taking the security
 Conveyance on saleThe vendee or transferee
 Conveyances or transfers operating as voluntary dispositions inter vivos.The grantor or transferor.
 LeaseThe lessee.
 Mortgage bond, debenture, covenant and warrant of attorney to confess and enter up judgmentThe mortgagee or obligee in the case of a transfer or re-conveyance the transferee, assignee or disponee or the person redeeming the security
 SettlementThe settlor

Exempted Documents:

No.Generally Exempted Documents
 Transfers of shares in the Government or legislative stocks or funds of Nigeria.  
 Instruments for the sale, transfer or other disposition, either absolutely, or by way of mortgage, or otherwise, of any ship or vessel or any part, interest, share or property of or in any ship or vessel.
 All instruments on which the duty would be payable by Government.
 All instruments on which the duty would be payable locally by Government in Nigeria or any of the departments.
 Agreements made with the Nigerian Railway Corporation relating to the receipt and carriage of passengers, goods or animals.
 Indemnity bonds given to the Nigerian Railway Corporation by consignees (when the railway receipt is not produced) in respect of the delivery of consignments of fresh fish, fruit and vegetables, and other perishable articles.
 An instrument of apprenticeship to which the Government is a party.
 Bond given by public officer for the execution of his duties.
 A instruments on which the duty would be payable by any Consular Officer arising out of his official functions where the foreign government he represents grants the like exemption to Nigerian Consular Officers.
 Instruments relating to the alienation, of land or any interest therein which are approved by Local Authorities of the Southern States of Nigeria in accordance with rules made by them under the Local Government Laws.
 All instruments relating to the alienation of land or any interest therein which are approved by any local government council under any by-law made under either the Eastern States Local Government Laws or the Western States Local Government Laws, 1953.
 All instruments regarding which the Government of the Federation is competent to make laws executed by or on behalf of any co-operative society registered under any Act or Law or by any officer or member of such a society relating to the business of such society.
 All documents relating to the transfer of stocks and shares.
 Shares, stock, or securities transferred by a lender to its approved agent or a borrower in furtherance of a regulated securities lending transaction.
 Shares, stock, or securities returned to a lender to its approved agent by a borrower in pursuance of a regulated securities lending transaction.
 All documents relating to securities lending transactions carried out under regulations issued by the Securities Exchange Commission.

Stamp Duty Rates:

S/NInstrumentNature of DutyRate
 Admission as a barrister or solicitorFlatN50
 Affidavit, Affirmation, and Statutory DeclarationFlat45k
 Agreement under handFlat15k
 Appointment of trusteeFlat1.50K
 Charter partyFlat9k
 Contract (Except other contracts specifically charged with stamp duty in the SDA)Flat15k
 Contract NoteAd-valorem0.08%
 Conveyance or transfer by way of securityAd-valorem0.375%
 Conveyance or transfer on sale of any propertyAd-valorem1.50%
 Debenture for securing payment of moneyAd-valoremN3
 Declaration of any use of trustFlatN3
 Deed of any kind not described in the schedule to the ActFlatN3
 LeaseAd-valorem0.78% if lease period is not more than 7 years 3% if lease period is between 7 6% if lease period is over 21 years
 Loan capitalAd-valorem0.125%
 Marketable securitiesAd-valorem2.25%
 MortgageAd-valorem0.38%
 Increase in share capitalAd-valorem0.75%
 InsuranceAd-valorem0.08%
 Power of attorneyFlat3k

Please do not treat the foregoing as tax advice as it is only an expression of our Tax Information Service. All enquiries should please be directed to our TaxThursday Desk at resources@taxaide.com.ng; +234 700 TAXAIDE.


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