Why has the N20 trillion collected as stamp duty revenue not remitted to the Federation Account by banks and other financial institutions?
The Senate on Tuesday directed its Committee on Finance to investigate the circumstances of the failure to act.
It mandated the committee to investigate what happened to the revenue collected from 2013 to 2016 and “financial accountability of stamp duty collections from 2016 when the Central Bank of Nigeria (CBN) officially directed all banks to collect on behalf of the Federal Government to date.”
But a tax expert and member of the Joint Tax Board who confided in The Nation said the Stamp Duty Law was clear for banks to remit, but that the challenge has remained the interpretation of the law, which created room for a hold-back on the revenue.
The source said some tax consultants had approached state governments and advised them to ask for their stake in the Stamp Duty and should not leave all the funds to the Federal government.
The source also said that the fight between Nigerian Postal Service (NIPOST) and Federal Inland Revenue Service (FIRS) on which agency should collect the Stamp Duty has also contributed to the non-remittance of the fund to government.
“I think the entire Stamp Duty policy should be reviewed and a definite interpretation given on the Act mandating its collection. Until that is done and banks that fail to remit sanctioned, collection will remain a big challenge for government,” the source said.
Some of the banks contacted also said that remittance will not be a challenge when all the knotty issues around collection and remittance have been addressed.
“There are no doubts that the money belongs to the government,” they said.
The Senate resolution on the pending N20 trillion stamp duty was based on a motion titled: “The need to improve Internally Generated Revenue (IGR) of the Federal Government of Nigeria significantly by over N5trillion annually through non-oil revenue sources available at its disposal” moved by Senator Patrick Akinyelure.
In his contribution, Senate President, Ahmad Lawan, blamed the non-remittance on stamp duty collection agencies.
Lawan said: “What we have been expecting to be available as stamp duty is not so and what has happened is because those that were supposed to collect the stamp duty were taking advantage of the way the Stamp Duty Act has been.
“I believe from January, the stamp duty collection will be significantly improved. We have also come up with another idea of engaging all revenue agencies every quarter for evaluation of their collections. The idea is not to allow agencies just do what they want.”
In his lead debate, Akinyelure urged the Senate to note that the Federal Government had projected revenue of over N2.5 billion annually from the payment of stamp duties from the financial services industry since 2016.
The Ondo Central senator said the Central Bank of Nigeria (CBN), had issued a circular directing all banks and other financial institutions to charge stamp duty of N50 on lodgment into current accounts with value of N1,000 and above, towards the realisation of the revenue projection.
He noted that the CBN’s cash-less policy started from six pilot states in 2012, and that the amount is expected to double to N5 trillion, since the policy was extended to 30 states on April 1, 2017.
Akinyelure said that following the CBN’s circular, all Deposit Money Banks and other financial institutions commenced charging the N50 per eligible transaction.
He lamented that despite the appointment of a consultant by the Federal Government in 2017 to help the country recover over N20 trillion from Nigeria Inter-Bank Settlement System (NIBSS), “the CBN and NIBSS have technically refused to comply with the Presidential directive.”
Senators Istifanus Gyang, Isah Jibrin, Rochas Okorocha and Ahmad Babba Kaita supported the motion.