25.2 C
Lagos
Sunday, December 4, 2022

FIRS Provides Clarifications on Administration of Stamp Duties in Nigeria

Must read

- Advertisement -

Following the recent launching of its adhesive stamp, the Federal Inland Revenue Service (FIRS) has issued a press release to provide clarifications on the administration of stamp duties in Nigeria. The guidelines provided by the FIRS are as follows:

• Stamp duty is applicable on all dutiable instruments, such as agreements, contracts, receipts, memorandum of understanding, promissory notes, insurance policies and other instruments stipulated in the Schedule to the Stamp Duties Act, Cap S8, Laws of the Federation of Nigeria 2004 (as amended) (SDA or “the Act”).

• The Finance Act, 2019 has expanded the scope of the SDA to include technology, e-commerce and cross-border transactions, in line with global practice and current economic realities.

• Stamp duty is chargeable on both physical and electronic dutiable instruments, either as a fixed sum or a percentage of the consideration on the instrument (ad-valorem) as illustrated in the sample table of rates contained in the press release.

• The FIRS affirms that it is the competent authority to impose, charge and collect stamp duties on all dutiable instruments executed between a company and an individual, while the remit of the State tax authorities (STAs) is limited to collection of stamp duties on instruments executed between individuals. However, the FIRS is the relevant tax authority to collect stamp duties on all banking transactions, even when the parties thereto are individuals, especially electronic fund transfers.

• A fixed-rate of ₦50 FIRS’ adhesive stamp is applicable on all receipts. Also, electronic transfers above ₦10,000 through the Money Deposit Banks (MDBs) will attract a stamp duty of ₦50 which the MDBs are obliged to remit to the FIRS.

• Stamp duties due to the Federal Government and collectible by the FIRS are to be remitted into the FIRS Stamp Duties Account with the Central Bank of Nigeria, while the stamp duties due to State Governments are to be remitted to the stamp duties accounts of the States.

• The burden of payment of the stamp duties on contracts and bank transfers is that of the beneficiary of the contract and the customer who initiated the transfer, respectively. The party making the payment have the obligation to account for the stamp duties applicable on the transaction. Therefore, ministries, departments, agencies, landlords and other executors are agents of collection for stamp duties purpose and are required to ensure that their service providers, contractors, tenants, etc. pay the applicable duties on the relevant instruments.

• The postage stamp administered by the Nigerian Postal Service (NIPOST) for delivery of goods does not denote stamp duties and, therefore, is not a substitute for the FIRS’ adhesive stamp.

• Failure to deduct or remit stamp duties into the appropriate stamp duties account would attract penalty and interest as provided by the SDA.

In conclusion, the FIRS reiterated its commitment to make stamp duties the next major source of revenue for funding the Federal Government’s budgetary requirements in the face of dwindling oil revenue.

- Advertisement -

More articles

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisement -

Latest article