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High Court Upholds Illegality of Stamp Duty Deductions Prior to Amendment of Act

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The Federal High Court (FHC or “the Court”) Asaba Division, last month held that collection of stamp duties on prior to the amendment of the Stamp Duty Act was illegal.

In the case between Mr. Rupert Irikefe (trading as Abimbola Energy Ventures (the Plaintiff) and Central Bank of Nigeria (CBN), Zenith Bank Plc (“the Bank”) & Attorney General of the Federation (AGF), collectively referred to as (“the Defendants”) the FHC said that collection of stamp duties on teller deposits or electronic transfers of monies prior to the amendment of the Stamp Duty Act, Cap. S8, Laws of the Federation of Nigeria (LFN), 2004 (as amended) (SDA) was arbitrary, unlawful and illegal and contemptuous of the lawful orders of superior courts of competent jurisdictions.

Further, the FHC awarded exemplary damages against the CBN and Bank to set an example to tax and regulatory authorities that wilfully flout decisions of the courts of law.

Facts of the Case

The Plaintiff operates a current account with the Bank and observed several deductions of ₦50 and ₦100 from his current account between 2016 to 2018. In 2018, the Plaintiff approached the Bank’s offices in Asaba and Warri to inquire the basis of the stamp duties charged on his current account. The Bank referred him to the FHC’s decision the case between Kasmal International Service Limited (KISL) vs. Standard Chartered Bank Nig. Ltd & 22 Ors (SCB &Ors) (Suit No.: FHC/L/CS/1462/2013), which the Bank claimed supported the deduction of the said amounts.

The Plaintiff informed the Bank of the subsisting decisions of the Court of Appeal (COA) in the same case between KISL vs SCB & Ors (Suit No : CA/L/437A/2014) and the FHC’s decision in the case between Retail Supermarkets Nigeria Limited vs Citibank Nigeria Limited and the CBN (Suit No: FHC/L/ CS/126/2016), wherein the courts held that there was no express provision in the SDA or any other law imposing any obligation on the Bank to collect and remit ₦50 as stamp duties on teller deposits or electronic transfers from ₦1,000 upward.

Consequently, the Plaintiff requested the Bank to refrain from deducting stamp duties from his account and to refund the amounts deducted thus far. However, the Bank refused to refund the deducted amounts and continued to charge stamp duties on the Plaintiff’s account.

Based on the arguments of the parties, the FHC formulated one key issue for determination, which was, “whether from the totality of the materials presented before the Court, the Plaintiff is entitled to any or all of the reliefs sought?” FHC’s decision After considering the arguments of both parties, the FHC held that: i. By disobeying the subsisting decisions of the COA and FHC regarding the charge of stamp duties, the CBN acted in bad faith by its action and, therefore, cannot be shielded by Sections 52 (1) of the CBN Act and 53 (1) of the BOFIA, respectively.

The FHC, therefore, granted reliefs 1, 2, 3, 4, 5 and 8 sought by the Plaintiff. The exemplary damages sought in relief 7 was also granted but limited to ₦2 million, to set an example that it is a reprehensible conduct to willfully disobey decisions of competent courts of law. Relief 6 was denied.


According to tax firm KPMG, the FHC’s decision reaffirms its earlier decision and that of COA on the illegality of stamp duties deduction on teller deposits or electronic transfers of monies by banks prior to the amendment of the SDA by the Finance Act, 2019.

“It is important to state that the FHC’s decision will only apply to periods before the amendments in the Finance Act, 2019 became effective. Therefore, from 13 January 2020 to the date of commencement of Finance Act, 2020, all electronic receipts/ transfers from ₦10,000 for all types of accounts in Nigeria were liable to stamp duty of ₦50, in line with the new Section 89(3) of the SDA introduced by the Finance Act 2019. Further, the judgment reiterates several court decisions that circulars or guidelines issued by regulators and agencies of government do not constitute a delegated or subsidiary legislation and have no enforceable legal basis. Although regulators and government agencies may issue guidelines and circulars, such administrative documents cannot be used as instruments to amend or substitute the provisions of extant laws.”


The grant of exemplary damages by the FHC against the CBN and Bank is cautionary for tax authorities and regulators that wilfully disobey existing decisions of courts of law and will motivate them to comply with court decisions.

“At the same time, it provides aggrieved taxpayers a legal basis for seeking reliefs against extra-legal practices of government agencies,” KPMG said.

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