Emmanuel Kehinde, Ilorin
Managing Consultant/Chief Executive Officer, Maroct Consultants Group, Chief Ubani Uzoma Francis, (FCTI), has called on the 36 Governors in Nigeria to stand up and collectively demand for the Stamp Duties revenue without fear or favour, adding that it is their Constitutional Right to do so.
He opined that all the stamp duties revenue belongs to the different states of the Nigerian federation.
Ubani spoke in Abuja on ‘Stamp duties: Practical approach on fostering united front on issues bothering on the collective interest of the States,’ during a meeting of the Nigerian Governors Forum on Tuesday, March 15, 2022.
He stated that said that the Federal Government of Nigeria through the Federal Inland Revenue Service, is only an agent to states on collection of stamp duties.
According to him, the different states of the Federation should take note that, in respect of the collection of stamp duties/levies revenue in Nigeria, the states are the principals; while the Federal Government (FG) through the Federal Inland Revenue Service, (FIRS) is only “Constitutionally designated collection agent.”
He said consequently, the FG/FIRS is accordingly mandated by the provisions of Section 163 (b) of the Constitution of the Federal Republic of Nigeria, 1999, as amended, which, according to him, means that FG/FIRS is obliged to follow the strict dictates and spirit of the said constitutional provisions.
He said the alleged orchestrated deception, unfair, and unwholesome collection practices should stop, particularly in the payment of the net proceeds of the duties/levies collected, to the different states of the federation in compliance with the constitution which is the supreme law of Nigeria.
Ubani, who is also member, Taxation Standards and Practice Monitoring Committee of Chartered Institute of Taxation of Nigeria stated that there is a clearly defined separation of collection of powers.
According to him, Nigeria’s operative constitution, which is the 1999 Constitution of the Federal Republic of Nigeria, as amended, made provision for different levels of authorities, responsibilities, and powers for each level of government and how to finance the carrying out of its responsibilities for assigned activities.
He stated that there are various statutory legislations in place to enable the various tiers of government to carry out their respective duties.
He explained that one of such legislation is the Stamp Duties Act, CAP S8, LFN, 2004, as amended, which makes provisions for the imposition and collection of revenue from stamp duties in respect of instruments made between companies, on one hand, and individuals, on the other.
He contended that Section 4 (1) of the Stamp Duties Act, 2004, as amended by Section 53 (a) of the Finance Act, 2019, empowered the Federal Government of Nigeria, through the Federal Inland Revenue Service (FIRS), to collect duties derivable from instruments initiated and executed or transactions initiated and carried out between two companies, and between a company and an individual, group or body of individuals i.e. corporate bodies.
He added that while Section 4 (2) of the Stamp Duties Act, as amended by Section 53 (b) of the Finance Act, 2019, empowered the relevant tax authorities in different states of the Federation, to impose and collect duties on instruments initiated and executed and/or transactions initiated and carried out between persons or individuals, whether electronically done or otherwise by bank tellers or other documents within each of the different States territories.
Ubani further opined that Section 4 (1) and (2) of the Stamp Duties Act, 2004, as amended, clearly stated what is collectible between the Federal Government of Nigeria, on one hand, and the different States of the Federation, on the other.
According to him, the different states of the Federation are obviously entitled, pursuant to Section 4 (2) of the Stamp Duties Act, CAP S8, LFN, 2004, as amended by Section 53 (b) of the Finance Act, 2019, and Section 89, as amended by Section 54, of the Finance Act, 2019, as well as the new Section 89A, which was introduced by the Finance Act, 2020; to collect stamp duties on qualified chargeable electronic transfers, teller deposits and other qualified dutiable instruments initiated and executed between persons or individuals, within the territories of the different States of the Federation.
The Maroct boss explained that in the Finance Act, 2019, the definition of stamp, instrument, and receipt was enhanced to include electronic transactions and receipts and specifically imposed a charge of N50.00 on electronic transfer of N10, 000.00 and above made through any bank platform.
He added that the Finance Act, 2020 further amended the Stamp Duties Act, 2004, by the introduction of a new Section 89A, which introduced an Electronic Money Transfer Levy on electronic receipts or transfers in banks or financial institutions.
According to him, it did not abrogate the original Section 89, which is still effective and subsisting.
The consultant further said that the new Section 89A introduced by the Finance Act, 2020, also did not render the provisions of Section 4 (2) of the Stamp Duties Act, 2004, as amended, ineffective, because any “transfer levy” paid by individuals on transfers between persons or individuals, is still collectible by the relevant Tax Authorities in the different states of the Federation.
He further said that Section 4 (2) of the Stamp Duties Act, 2004, as amended, still remained for the exclusive collection of the relevant Tax Authorities in the different states of the Federation.
He opined that the change of nomenclature from duty to levy did not in any way remove the powers of the relevant Tax Authorities in the States of the Federation, to charge and administer duty and/or levy paid by individuals on qualified chargeable instruments, initiated and executed and/or transactions initiated and carried out between persons or individuals in their various States under the Stamp Duties Act, 2004, as amended.
Ubani said that it is very clear that the relevant tax authorities in the different states of the federation, are to collect stamp duties and/or transfer levies emanating from qualified chargeable instruments initiated and executed or transactions initiated and carried out between persons or individuals pursuant to Section 4 (2) of the Stamp Duties Act, as amended by Finance Acts, 2019 and 2020 respectively.
He opined that the distortion of facts, misinterpretation, misunderstanding, and/or outright ignorance of the provisions of the Stamp Duties Act, in some quarters, is undoubtedly targeted at undermining the very clear separation of powers provided in Section 4 (1) and 4 (2) of the Stamp Duties Act, 2004, as amended by Section 53 (a) and 53 (b) of the Finance Act, 2019 respectively.
According to him, the legislative scheme in Stamp Duties Act was validly enacted by the National Assembly, and reflected a clear policy-based choice, that favored individual States’ autonomy and control over one’s revenue, under Section 4 (2) of the Stamp Duties Act, 2004, as amended.
He further advised that the different States of the Federation should not allow usurpation of the powers vested on the various states to collect stamp duties as the position of the Stamp Duties Act, 2004, as amended, according to him, is very clearly stated and should honestly be interpreted accordingly in favor of the different States of the Federation.
Ubani said, “What we have done in this matter of STAMP DUTIES, is that we extensively researched the provisions of the Stamp Duties Act, and the constitutional provisions, as it concerns the Stamp Duties Act, and our research revealed a very solid and strong ground, in favour of the different States of the Federation.
“We decided to hold on to that strong and firm ground discovered in the provisions of the 1999 Constitution of the Federal Republic of Nigeria, as altered, not deterred by the overwhelming threat coming from different quarters, in form of Letters and/or Circulars on stamp duties from CBN, Press Release on stamp duties from FIRS, Newspaper Publications on stamp duties from NIPOST, and Letters on stamp duties from the office of the Attorney General of the Federation.
“It was Mahatma Gandhi who said, and I quote: “Many people, especially ignorant people, want to punish you for speaking the truth, for being correct, for being you. Never apologize for being correct, or for being years ahead of your time. If you are right and you know it, speak your mind. Even if you are a minority of one, the truth is still the truth.’
“Consequently, it is our fervent belief that the truth shall prevail at the end.”
He added, “We, therefore, the different States of the Federation, to form a united front and demand for the stamp duties revenue that rightly belong to you by the very clear provisions of the Constitution of the Federal Republic of Nigeria, 1999, as amended.
“Having now known your strong ground on stamp duties revenue, we urge you to be united and firmly hold on to it.”
The tax consultant said that Stamp Duties Revenue streams are a highly technical area of taxation that is very much misunderstood and very highly misinterpreted by many.
He advised that State Governments should be very careful in engaging technical support/advisers in the area of Stamp Duties Revenue Head, as according to him, many that profess, they know, are allegedly misunderstanding and misinterpreting the provisions of the Stamp Duties Act and the provisions of the Constitution of Federal Republic of Nigeria, 1999, as amended, as it concerns stamp duties.
Ubani said, “The different State Governments are strongly advised and enjoined, as a matter of urgency, to seriously-overhaul, review and domesticate Stamp Duties and Capital Gains Laws, in their various States, for effective and optimal collection of stamp duties and capital gains tax revenue in their different States.
“For quick and immediate wins: Section 115 of the Stamp Duties Act, empowers the Governor of a State to make Regulations to the further and better carrying into effect of the objects and purposes of this Act, among others.
“There is urgent need to provide technical training and capacity development for tax administrators and key staff of the States Internal Revenue Service for efficient service delivery and to avoid misinterpretation and arbitrariness.”