It is unfortunate that stamp duty collection is riddled with controversy at a time the government is enmeshed in binge borrowing to finance most of its projects. A lawmaker, Muhammed Gudaji Kazaure, representing Kazaure/Roni/Gwiwa/Yankwashi Federal Constituency of Jigawa State, recently claimed that N89trillion collected from stamp duty was unaccounted for. He also alleged that the Central Bank of Nigeria (CBN), commercial banks and other financial institutions had collected the said amount, withheld 40 per cent of it and remitted only a paltry percentage to the government.
However, both the CBN and the Presidency had refuted the allegation made by the lawmaker. According to the CBN Director, Corporate Communications, Osita Nwanisiobi, the apex bank has nothing to do with the alleged missing funds. Also, Garba Shehu, the Special Assistant, Media and Publicity, to President Muhammadu Buhari, said the entire banking sector deposit was not anywhere close to the N89trillion as claimed by Kazaure. Garba said President Buhari had long discontinued plans to trace the sum of N20trillion alleged to have been raised from the stamp duty from 2013-2016 when the consultants to the project reportedly demanded 7.5 per cent as their fee.
Since Kazaure’s allegation is weighty enough, it should not be dismissed. The matter must be thoroughly investigated and the findings made public. Nigerians deserve to know the veracity or otherwise of the alleged unaccounted stamp duty collection and the actual amount involved and where it is domiciled. And if it has been misappropriated, Nigerians must know as well. The Stamp Duty Act imposes 0.75 per cent levy on the authorised share capital of companies at incorporation. Also, banks and other financial institutions are required to collect a levy of N50 on every eligible transaction above N10,000.
According to Interbank Settlement system, electronic payments have increased to N220.93trillion. It was N124.09trillion in October 2021. From January-October 2020, the total volume of transactions was put at N1.55trillion, amounting to N120.42trillion in value. A lot of money ought to have accrued to the government from stamp duty collection.
The right thing the government can do now is to constitute a probe panel to unravel the allegation. The denial by the CBN and the Presidency is not enough. It is only a probe panel that can reveal the truth or otherwise of the matter. The fight against corruption must consolidate with this matter.
Before the stamp duty matter, the Nigerian Postal Service (NIPOST) and the Federal Inland Revenue Service (FIRS) were locked in a controversy over which of them is charged with the responsibility to collect stamp duty charges on receipts, e-transfers and teller deposits on behalf of the Federal Government under the Stamp Duty Act Cap S8 Laws of the Federation 2004 (as amended by the Finance Act 2019/2020 Stamp Duty Act).
While the CBN mandates Deposit Money Banks to remit all stamp duty charges to NIPOST designated account, the FIRS went to court claiming that Section 4(1) (2) of the Stamp Duty Act, as well as Section 8 of the FIRS provide that it is the competent authority to impose, charge and collect, and enforce payment of taxes/levy as specified in the Act.
The confusion over which of the agency is vested with the powers to collect stamp duty charges may have led to the alleged diversion of stamp duty collection. Ordinarily, the collection of stamp duty and the total amount collected so far and its whereabouts ought not to be shrouded in secrecy if there is transparency in its management. Financial graft can only thrive in an opaque system where due process is observed in the breach.
At a time Nigeria is grappling with acute infrastructure deficit, the reported N89 trillion stamp duty money would have been used to fix some of them or even revamp the health and education sectors and curb the brain drain in them. While government’s resolve to fight corruption in its ramifications is welcome, efforts should be geared towards checking corruption in the agencies. There is need to ensure uniformity in the use of stamp duty charges. That is why the 36 state governments, through their Attorneys General had dragged the Federal Government to the Supreme Court over its alleged failure to remit proceeds of stamp duty into the states’ accounts. It is the contention of the state governments that the collection of stamp duties on all transactions involving individuals and groups in their territories is legally vested on them. Amending the Stamp Duty Act will streamline its collection and management.