FG has collected N20bn in stamp duty from banks in 2020

07/01/2020 | Pulse Nigeria | Samson Toromade
President Muhammadu Buhari (right) signed a Finance Bill into law last year to, among other things, raise government revenue. Chairman of the Federal Inland Revenue Service (FIRS), Muhammad Nami (left) says the significant increase in stamp duty revenue this year is only a tip of the iceberg [Vanguard]

A total of N66 billion from all relevant agencies has been remitted to the Federation Account in 2020.

The Federal Inland Revenue Service (FIRS) has collected a total of N20 billion in stamp duty from money deposit banks between January and June 2020.

A N50 stamp duty is charged on all deposits, and electronic transfers of naira-denominated current and savings accounts for transactions of 10,000 and above.

The charge is mandated by the Finance Act of 2019, and the revenue is remitted to the Federal Government.

Access Bank drew the outrage of its customers when it deducted three months' worth of stamp duty all at once last weekend.

Public outcry forced the bank to reverse the deductions and promise to pay the duty for the three month period to the government on behalf of its customers.

While speaking during the inauguration of the inter-ministerial committee on audit and recovery of stamp duty on Tuesday, June 30, 2020, FIRS chairman, Muhammad Nami, noted that only a total of N18 billion was collected as stamp duty in 2019.

However, he said the total amount remitted to the Federation Account from all relevant agencies between January and June 2020 already stands at N66 billion.

He disclosed that N7.9 billion has also been realised as stamp duty revenue from stamping of instruments at the Corporate Affairs Commission (CAC).

Nami said the collection performance witnessed is a tip of the iceberg compared to its potentials.

"The amendment and the effective implementation of the Stamp Duty Act, simplified administration process, and the audit and recovery exercise will raise the revenue bar for the government significantly," he said.

He promised that the FIRS is prepared to reposition stamp duty as the next major revenue source for Nigeria as the country struggles to turn its attention away from the dwindling oil market.

"Indirect taxes such as stamp duty remain the viable and sustainable alternative revenue source for funding budgetary requirements by the Nigerian government," Nami noted.

The unstable global oil market, worsened by the coronavirus pandemic, has significantly damaged the Nigerian government's earning power as the country depends on oil revenue.

Secretary to the Government of the Federation, Boss Mustapha, says Nigeria must think outside the box to earn more revenue to run the country [Twitter/@econec_resao]

While speaking at the event, the Secretary to the Government of the Federation (SGF), Boss Mustapha, said there's potential to generate high returns from stamp duty collection and make it second only to crude oil earnings.

He said stamp duty revenue has the potential to yield up to N1 trillion annually if properly harnessed.

"The government has recognized the fact that for meaningful development to be achieved, it has to look inwards to use every available means to shore up its revenue-generating capacity.

"For too long, the country has depended on oil as the main cash cow of the economy even though it is richly endowed with other viable revenue yielding sources.

“In the face of dwindling oil revenue, and the global shift away from oil-dependent technological products, it is even more compelling now to begin to think out of the box in order to safeguard the future of our country," he said.

The SGF charged the inaugurated committee to recover stamp duties charged from January 2016 to date but yet to be remitted by the relevant agencies including banks and ministries, departments and agencies (MDAs).

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Samson Toromade

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