YBTC News—June 30, 2020, the Federal Capital city of Abuja witnessed the formal inauguration of the Inter-Ministerial Committee on Audit and Recovery of Back Years Stamp Duties as well as, the Launch of Federal Inland Revenue Service Adhesive Stamp. The theme of the event was:” Stamp Duties Act: Repositioning Nigeria Towards Greater Revenue Generation.”
Before that event, a huge smog of haze had somewhat, blighted a clear understanding of the meaning and the essence or, significance of the campaign by the FIRS for a reinvigorated regime of Stamp duty in the country.
In retrospect, some of the grey areas would now seem as a web of obfuscations deliberately woven by those who, ordinarily, should know better, but who, for pecuniary reasons, refused to do so. There were of course, some of the controversies that arose from genuine misconception by some key players and the general public thereby, resulting in different prisms of perceptions and attendant misgivings and innuendos.
The calibre of the guests that attended and spoke at the event was the first bust of light over the had shrouded the subject all along. There were, for instance, the Senate President, Ahmad Lawan and the House Speaker, Femi Gbajabiamila who, as leaders of the nation’s highest legislative houses, demonstrated by their presence and speeches, the support of the lawmakers to the FIRS in its bid to take control, nurture and midwife the new focus on Stamp duty collection. The presence of the duo also shattered talks that had been making rounds in the rumour mills to the effect that, the leadership of the National Assembly were not attuned to the program and would as such, stay away from the event.
From the Executive arm of government, the presence and address of Abubakar Malami, Attorney General and Minister of Justice, explicitly highlighted the legality of the 2019 Finance Act, its provisions on Stamp duty and, the legal status of the FIRS as the sole statutory agency charged with the supervision and collection of all revenues derivable from Stamp duty. Malami pointedly clarified:”It follows therefore that on the strength of the provision of FIRS Act, it is conferred with powers to administer (including perform audit exercise) and collect all taxes and levies due to the federal government”.
Still from executive arm, the Secretary to the Government of the Federation, SGF, Boss Mustapha and the Minister of Finance, Zainab Shamsuna Ahmed, also, variously buttressed the legal status of the FIRS in the administration of stamp duties. The two as well, stressed on the significance of Stamp Duty as, ” a tax type that serves to open untapped revenue sources for increased revenue collection.”
In a summary of all the enlightenment he had done in media interviews and other public fora on the FIRS and the reinvigorated regime of Stamp Duty administration, Mr Muhammad Nami, the Executive Chairman of the FIRS, used the occasion to further elucidate on the philosophy, logic, essence and benefits of the commitment of his agency on stamp duty as the latest thrust in delivering on its mandate of gingering up the nation’s revenue profile through robust tax administration and collection mechanisms.
At the end of the day, all the grey areas were cleared, with stakeholders, key industry players and the general public much better informed on all the shades of the Stamp Duty. Just what is stamp duty?
In a layman’s language, it is the token of levy or tax paid for certain commercial services, exchange or transactions between persons, groups or corporate entities. In spite of similarities on.the surface, stamp duty is however, fundamentally different from postal stamps or signage which universally is the responsibility of postal agencies. Therefore, the controversy between the Postal service agency and the FIRS, should never have arisen in the first place.
The FIRS Executive Chairman defined stamp duty as, “essentially a duty chargeable on instruments physically or electronically.” The Stamp Duty Act defines “duty”, to mean, “any stamp duty for the time being chargeable under any other Act and also includes any fee chargeable hereunder. “Stamp”, according to the Act, is ” an impressed pattern or mark by means of an engraved or inked block die as an adhesive stamp or an electronic stamp or electronic acknowledgment for denoting duty fee”
Pointing out that Stamp Duty in Nigeria dated back to 1939, Mr Nami said the 2019 Finance Act was merely, the latest in the series of amendments the Stamp Duty Act had gone through over the years. In tune with contemporary trends, he said, the Finance Act appropriately, “recognizes technology, economic realities, e-commerce and cross border transactions” in the administration of tax collection from stamp duties.
While pointing out that dutiable items under the 2019 Finance Act have been expanded to include bank deposits or transfers, Mr Muhammad Nami also drew attention to the upward review from N4.00 to N50.00 in bank customers’ deposits of N10,000.00 and above per transaction.
Giving a window into the potentials of the new drive on Stamp Duty administration, the FIRS helmsman told the gathering that about 66 Billion Naira had been netted by his agency between January and May this year. The figure is against the total sum of 18 Billion Naira collected for the entire year 2019! He attributed the “significant leap” to the “dynamism triggered by the Finance Act 2019, sums warehoused by the CBN in respect of prior years, deployment of technology and, stakeholders collaboration” among other mechanisms now in use by the FIRS.
At the of the day, the public is much more enlightened on what Duty Stamp is and what it is not. We now know for instance that, it is not as such, a newly invented concept but, one that goes back to colonial days. Stamp Duty is also a universal taxational standard found in most economies of the world. What now seems to appear unsettling about stamp duty is the reinvigorated buoyance given to it by the 2019 Finance Act and, the manifest diligence and single-minded commitment to its administration by the new management at the Federal Inland Revenue Service, FIRS.
People all over the world pay taxes to the public treasury on rent or, over sales of properties just as, bank transactions on certain sums are dutiable. Under the new regime of Stamp Duty in the country, citizens are being demanded to do that which is done in other countries by paying taxes. Understandably, this cannot be a piece of good news to a people who are not used to paying taxes and what they pay in the few areas that they pay, amount to one of the lowest in the world. The strident message is: buckle up, the long holiday is over.
Yes, the payment of tax by citizens is a civic responsibility that has been a component of human civilisation from time. According to the Christian scripture, while citizens should of duty, “give unto God what is God’s,” they should also obligatorily, ” give unto Ceaser , what is Ceaser’s,” through payment of tax even as they fulfill their spiritual obligations. Mr Muhammed Nami at the occasion put it another way by quoting an American President, Benjamin Franklin “In this world nothing can be said to be certain except death and taxes”.
In her remarks, the Minister of Finance, succinctly summarised it all: ” The significance of Stamp Duty as a tax type is that it serves to open untapped revenue sources for increased revenue collection. The adhesive stamps make voluntary compliance by tax payers a lot easier since they can now have easy access to the stamps…. In many jurisdictions, just as the Executive Chairman of the FIRS observed, Stamp Duties have become a major revenue.”
Against the backdrop of receding earnings from oil and the havoc of the corona virus pandemic on global economies, the Minister rationalized that, ” due to the precarious funding situation we are experiencing,” the government must put in place, “innovative and efficient tax administration in order to reverse the dwindling revenue trend”. In other words, hard and discomforting as it is, the resort to the panacea of the Stamp Duty is a therapy that we critically need to survive as a nation.
The Federal Inland Revenue Service has, since the coming on board Muhammed Nami as it’s Chief Executive, come under the searchlight and scrutiny of the general public and, of course, several interest groups. Aside the additional tasks thrust on it by the 2019 Finance Act, including administration of the Stamp Duty, Mr Nami has initiated a number of innovations in tax administration. He has as well, been talking of many lofty ideals which on the surface, are capable of taking the nation from her present economic doldrums. He owes it to himself, to go beyond rhetorics by walking his talk.
While at it however, fact is, not a few believe that Nigerians are already over burdened with multiple taxations. That is, in spite of the palliatives or reliefs contained in the 2019 Finance Act on a number of bank charges on transactions as well as, reduction in taxes paid by new and small scale entrepreneurs. Thus, while digging deep and wide into the Stamp Duty as, “a gold mine”, the people who literally, are the goose that lay the golden eggs must not be over tasked through excessive taxations. It is a “Catch 22” situation of sorts because, only the living pay taxes.
AYUBA AHMAD, A Kaduna-based Public Commentator.