Currently, Nigeria is losing a whopping N500 billion annually to non-implementation of a modern Stamp Duties Act, which could increase to N1 trillion per annum in subsequent years if the government failed to include the amendments being sought to the Act by the Nigeria Postal Service (NIPOST).
A research carried out by NIPOST in this regard has, however, shown that presently, Nigeria is losing N500 billion, yearly, due to its inability to collect stamp duty on all electronic transaction, while this would increase to over N1 trillion per year in the subsequent years.
To this end, NIPOST had sought amendments to the NIPOST Act Cap N127 LFN 2004 and Stamp Duties Act Cap S8 Laws of the Federation 2004; to strengthen its power to collect the revenue (stamp duties) and extend it to both physical and electronic transactions in all the sectors of the economy.
Due to improved technology that has given rise to electronic business transactions, the power of NIPOST to collect the N50 electronic stamp duty to denote electronic receipts, documents and other instruments, has been hampered.
In a letter written to President Muhammadu Buhari, the Senate President, Ahmed Lawal and the Speaker of House of Representatives, Femi Gbajabiamila, the Senior Staff Association of Statutory Corporations and Government Owned Companies (SSASCGOC), said Nigeria is losing huge revenue potentials to stamp fees collection, as a result of this legislation limitation.
SSASCGOC is the registered trade union that unionises all senior staff of states and Federal Statutory Corporations and Government Owned Companies, which include the staff members of NIPOST.
The union, therefore, informed President Buhari that with the amendments being sought to the Act, NIPOST has the capacity to generate N500 billion to the Federation Account in the first year, and N1 trillion per annum in subsequent years.
“It is important to state here that there are huge revenue potentials in the stamp fees collection if it is carefully implemented as sought by NIPOST. From the research carried out by NIPOST, it is believed that considering the value of denotable transactions in all the sectors of the economy, it is expected that the government will earn a minimum of N500 billion in the first year of implementation of the regulation. And this has the capacity to increase to over a trillion Naira per annum in subsequent years,” SSASCGOC said.
The union, however, lamented that the proposed bill to amend the provisions of the Stamp Duties Act has been forwarded to President Buhari twice but were not assented to by the President.
Besides, SSACGOC alleged that there was an overt move by the office of Minister of Finance to divert the collection which is the primary responsibility of NIPOST to the Federal Inland Revenue Service “at the detriment of NIPOST and overall national development.”
The union accused the Minister of Finance Zainab Ahmed of conniving with the FIRS to take over the job of NIPOST when FIRS realised that NIPOST efforts are beginning to yield fruit, even though FIRS had initially opposed the amendment.
“Your Excellency may wish to be informed that the Finance Bill before the National Assembly has a provision amending the Stamp Duties Act Cap S8 LFN 2004 in line with NIPOST request and as contained in the draft regulations earlier agreed by all the stakeholders. We are, therefore, surprised to discover that there had been overt move by the office of the Minister of Finance to divert the collection which is the responsibility of NIPOST to another agency of the Government – Federal Inland Revenue Service at the detriment of NIPOST and overall National Development,” SSACGOC said.
The letter read further: “Prior to the steps taken by NIPOST to ensure that this revenue source is tapped, no other agency of the government was collecting this stream of revenue but information has it that after NIPOST’s effort was about yielding the desired result, the Federal Inland Revenue Service (FIRS) became interested in the collection.
“We are aware that the Federal Inland Revenue Service had earlier in 2013 advised RMAFC that this type of stamp duties revenue being pursued by NIPOST were nuisance taxes that should be abolished and even advised the then Minister of Finance and Coordinating Minister of the Economy to that effect.
“We wonder, therefore, why such nuisance taxes has now become attractive to them for collection. It is important to state that the Federal Inland Revenue Service and State Board of Internal Revenue Services thought erroneously that NIPOST was veering into tax collection which is within their statutory responsibility; NIPOST’s position clearly stated that it was merely selling its stamp for the purpose of denoting receipts, documents and other instruments as provided for by the Act to validate and authenticate such transactions.”
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