Kola, an entrepreneur in Lagos State woke up to see multiple bank alerts on his phone much to his greatest surprise. No, those were not credit alerts but debit alerts, the worst alerts you can receive especially for transactions you did not initiate. As we progress in this article you would understand what those debits alerts were and no, he was not scammed either.
I am sure you realize that we are in unprecedented times. More than ever before the Federal Government of Nigeria is intensifying efforts to ensure that all non-oil revenue sources are revived.
The saying ‘Tax is the new oil in Nigeria’ still remains valid. The Federal Government has put on its thinking cap and is digging deeper to ensure that no stone is left unturned as our main source of revenue is not performing at its best due to the COVID-19 Pandemic. The attention moved to the forgotten tax types and that’s when the lightbulb sparked – STAMP DUTIES!
According to the Secretary to the Government of the Federation (SGF), Mr. Boss Mustapha, who represented President Muhammadu Buhari, at the inauguration of the Inter-Ministerial Committee on Audit and Recovery of Back Years Stamp Duties and the Launch of the FIRS Adhesive Stamp said that stamp duty would be second to oil in revenue generation.
Stamp Duty is a duty chargeable on both physical and electronic instruments.
A little background on Stamp Duties collection in Nigeria; Prior to the Finance Act, 2019, the Nigerian Postal Service (NIPOST) had been in-charge of stamp duty collection and had been empowered by the Stamp Duty Act 2004 (‘’the Act’’) to collect stamp duty.
Now, the Federal Inland Revenue Service (FIRS) by Section 4(1) of the Stamp Duties Act, is the only authority to charge and collect Stamp Duties upon instruments specified in the Schedule of the Stamp Duties Act where such duties relate to matters between a company and an individual, group or body of individuals.
Also, the relevant tax authority in a State, by Section 4(2) of the Stamp Duties Act, is empowered to collect Stamp Duties on instruments executed by individuals at such rate as may be determined by the Act.
The earlier narration in this piece about Kola were debit alerts from his bank from stamp duty. Please note that if you transfer N10,000 or more from one account to another, your bank will charge you N50. However, stamp duty will not be charged on transfers made by an individual into his own account within the same bank.
- Total Stamp Duty collection for Jan – Dec 2019 was N18billion.
- Total collection by FIRS from January 2020 to June 29th 2020 is as follows:
|Stamp duties remitted by Money Deposit Banks (MDBs)||20.00bn|
|Stamp duties revenue from stamping of instruments||7.90bn|
|Stamp duties revenue from stamping of instruments||39.00bn|
|Total stamp duty remitted into Federation Account from January, 2020 – May, 2020||66.00bn|
|Stamp Duty Rate|
|S/N||Name||Type||Rate||Extra Copy||Per Million|
|1||Appointment of Receiver||Flat Rate||₦500.00||N50.00||N/A|
|2||Appointment of Trustee or of Attorney||Flat Rate||₦500.0||N50.00||N/A|
|3||Appraisement or Valuation of Property||Ad Valorem||1.5%||N50.00||₦ 15,000.00|
|4||Bank Cheque Per Leaflet N1.00 per leaflet (Premium)||Flat Rate||₦1.0||N/A|
|5||Bank Deposit/Transfer||Flat Rate||₦50.0||N100.00||N/A|
|6||Bill of Sale||Ad Valorem||1.5%||N50.00||₦ 15,000.00|
|7||Bonds (Mortgage)||Ad Valorem||###||N50.00||₦ 3,750.00|
|8||Certificate of Occupancy, Partnership||Flat Rate||₦1000.0||N50.00||N/A|
|9||Contract Agreement||Ad Valorem||###||N50.00||₦ 10,000.00|
|10||Contract Notes||Ad Valorem||###||N50.00||₦ 800.00|
|11||Debenture||Ad Valorem||###||N50.00||₦ 3,750.00|
|12||Deed of Assignment||Ad Valorem||1.5%||N50.00||₦ 15,000.00|
|13||Deed of Gift||Ad Valorem||1.5%||N50.00||₦ 15,000.00|
|14||Deed of Release/Surrender/Discharge||Ad Valorem||###||N50.00||₦ 750.00|
|15||Deeds of Conveyance or Transfer on Sale of Property||Ad Valorem||1.5%||N50.00||₦ 15,000.00|
|16||Discharge or Release||Ad Valorem||###||N50.00||₦ 750.00|
|17||Documents from Ministries and Parastatals (Letter from Legal Adviser of the Ministry of Parastatals required)||Non Chargeable||Free||N0.00||N/A|
|18||Gift (Land)||Ad Valorem||1.5%||N50.00||₦ 15,000.00|
|19||Goodwill Debenture, Settlements||Ad Valorem||###||N50.00||₦ 3,750.00|
|20||Guarantor’s Form ( For Loan Application)||Flat Rate||₦500.0||N50.00||N/A|
|21||Insurance Policy/Policies||Ad Valorem||###||N50.00||₦ 750.00|
|22||Joint Venture Agreements||Flat Rate||₦500.0||N50.00||N/A|
|23||Legal Mortgage||Ad Valorem||###||N50.00||₦ 3,750.00|
|24||Legal Mortgage (Upstamping)||Ad Valorem||###||N50.00||₦ 3,750.00|
|25||Loan Agreement||Ad Valorem||###||N50.00||₦ 1,250.00|
|26||Loan Agreement (as accompanying document to a mortgage/debenture)||Flat Rate||₦500.0||N50.00||N/A|
|27||Marketable Securities||Ad Valorem||###||N50.00||₦ 22,500.00|
|28||Memorandum and Articles of Association (Alteration of memo)||Flat Rate||₦500.0||N500.00||N/A|
|29||Memorandum of Understanding (Related to Land, Sales, Joint Venture,. Surrender, Subdivision Agreements)||Ad Valorem||1.5%||N50.00||₦ 15,000.00|
|30||Memorandum of Understanding (Related to Ordinary agreements)||Flat Rate||₦500.0||N50.00||N/A|
|31||New Company Registration (Government Organizations Only)||Flat Rate||₦500.0||N50.00||N/A|
|32||Notaries Act||Flat Rate||₦500.0||N50.00||N/A|
|33||Oath and other affiliates bodies relating to above||Flat Rate||₦500.0||N50.00||N/A|
|34||Oaths, Affidavit-Affirmation, Statutory Declaration, Agreement (Memo of Handwritten) Ordinary||Flat Rate||₦500.0||N50.00||N/A|
|35||Ordinary or Open Agreement Underhand Articles||Flat Rate||₦500.0||N50.00||N/A|
|36||Power of Attorney – Revocable/not land related||Flat Rate||₦500.0||N50.00||N/A|
|37||Power of Attorney (Irrevocable/Land Related)||Ad Valorem||1.5%||N50.00||₦ 15,000.00|
|38||Power of Attorney (POA not relating to sales, conveyance, transfers of any landed property )||Flat Rate||₦500.0||N50.00||N/A|
|39||Promissory Notes of Ordinary Documents/I.O.U||Ad Valorem||###||N50.00||₦ 1,000.00|
|40||PROXY FORM||Flat Rate||₦500.0||N50.00||N/A|
|41||Sales Agreement||Ad Valorem||1.5%||N50.00||₦ 15,000.00|
|42||Settlement of any Instrument||Ad Valorem||###||N50.00||₦ 3,750.00|
|43||Share Increase||Ad Valorem||###||N50.00||₦ 7,500.00|
|44||Share Increase (Pre-Incorporation)||Ad Valorem||###||N50.00||₦ 7,500.00|
|45||Share Reduction||Flat Rate||₦500.0||N50.00||N/A|
|46||Share Reduction (Pre-Incorporation)||Ad Valorem||###||N50.00||₦ 7,500.00|
|47||Share Transfer||Non Chargeable||Free||N0.00||N/A|
|48||Share Transfer (Pre-Incorporation)||Ad Valorem||###||N50.00||₦ 7,500.00|
|49||Shipping Agreement||Non Chargeable||Free||N0.00||N/A|
|50||Surrender, Bills of Exchange||Ad Valorem||###||N50.00||₦ 7,500.00|
|51||Tenancy/Lease||Ad Valorem||6%||N50.00||₦ 60,000.00|
|52||Vending Agreement||Ad Valorem||1%||N50.00||₦ 10,000.00|
|S/N||Name||Type||Rate||Extra Copy||Per Million|
|1||Contract Agreement||Ad Valorem||1%||N50.00||₦ 10,000.00|
Here are the tax incentives on Stamp Duties in Nigeria including the relevant incentives in the 2019 Finance Act: