BREAKING NEWS, Opinion
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| By Tajudeen Kareem |
WHEREAS the Stamp Duty Act became law in 2004, relevant government agencies were lethargic, or I dare say myopic, in identifying it as a veritable source of national income. The Buhari Administration, with an expansionary budget, has vowed to harness all accruable income and plug all leakages.
Now with the proper implementation of the Stamp Duty Act, 2004, the Nigeria Postal Service has become the new kid on the block. Financial experts reckon that government can rake in about N3 trillion from stamp duties on financial services industry transactions per annum. Indeed, in realization of this new reality, NIPOST is now classified as a revenue-generating agency and promptly admitted as a bona fide member of the Federation Accounts Allocation Committee.
The Federal Government has projected to earn this year about N2.5 trillion from payment of Stamp Duties from the financial services industry as outlined by the Central Bank of Nigeria. This is indeed a significant contribution to national revenue pegged at N3.8 trillion in the 2016 budget. It therefore needs no emphasis to state that Buhari Administration places a big premium on earnings from the enforcement and diligent collection of fees on Stamp Duty.
The CBN had in January issued a circular directing all banks and financial institutions to charge stamp duties on lodgments into current accounts with value of N1,000 and above. Indeed, the apex bank had emphasized the need to shore up government revenue from the non-oil sector, especially from taxes and rates. The bank also reiterated that the measure was in compliance with the provisions of the Stamp Duties Act, LFN 2004 as reinforced by a court pronouncement in suit No. FHC/ L /CS / 1710/2013.
“With immediate effect, all Deposit Money Banks and other financial institutions shall commence charging N50 per eligible transaction in accordance with the provisions of the Stamp Duties Act and the Federal Government Financial Regulations 2009; that is, all receipts given by any bank or other financial institution in acknowledgement of services rendered in respect of electronic transfer and other teller deposits from N1,000 and above.”
As a revenue-generating member of FAAC, NIPOST now has the privilege of retaining a portion of its revenue, including those accruing from Stamp Duty fees as the cost of collection. Presently, the Nigeria Customs Service keeps seven per cent of its revenue while the Federal Inland Revenue Service retains four per cent of its own collections.
While the technical committee chaired by Revenue Mobilization Allocation and Fiscal Commission works out how much NIPOST can retain, it is necessary to clarify that Stamp Duty is not another form of taxation. Its collection does not lie with the FIRS. It is not a ‘tax’; rather it is classified as a ‘duty’. Its collection is sanctioned by the Stamp Duty Act, enacted in 2004 but largely ineffectual owing to the complacency on the part of NIPOST and its managers.
“NIPOST argues that its entitlement to stamp duty charge dates back to the era when post office stamps were statutory requirements on receipts issued for commercial, legal and other qualifying transactions,” posit Mr. Lekan Sote a financial analyst writing in The Punch recently. Purchases of hardware at the old G.B. Ollivant in post-independence times, to recall, actually came with receipts affixed with stamps. In recent time, every cheque leaf issued by banks carry a stamp duty seal at the lower left corner.
The Stamp Duties Act, Cap, 441LFN, 1990, is a variant of the original law crafted written in 1939. And Mr. Sote reasoned that banks had largely failed to comply with the law owing to its cumbersome details. He has also reminded NIPOST that the honey pot is quite large. Documents covered under the Stamp Duty Act include bank notes, promissory notes, share certificates, mortgage notes, agreements, conveyance of sale land, powers of attorney, contract notes, valuations, capital or limited liability companies, debentures, share warrants, insurance policy, customs bills of laden, bills of sale and receipts.
Section 89(2) of the Stamp Duty Act says: “Every receipt given by any person in acknowledgement of goods produced or services rendered should be donated by an adhesive postage stamp worth N50 issued by the Nigerian Postal Service.” Section 14(2) of the same Act compels a mandatory receipt to be denoted.
The Minister of Communications, Barrister Adebayo Shittu, on assumption of office, had vowed to clean the Augean staple by clearly articulating his vision for NIPOST and his mission to make telecommunication service providers behave responsibly. “The Ministry is determined to take NIPOST to greater heights. The era of merely selling stamps and carrying parcels is over. We will re-engineer the agency to run on the fast lane, applying technology to render financial-inclusion services in all corners of our vast country,” Shittu said while inspecting NIPOST facilities in Lagos.
The re-engineering at NIPOST began a few weeks ago with the appointment of Pricewaterhouse Cooper to screen and evaluate applicants for the post of Post-Master General. Needless to emphasize, the in-coming helmsman must be innovative, smart and technology-savvy. That is the direction the Minister has outlined.
With a workforce of about 10,500 and 1,184 post offices and postal agencies, the new NIPOST requires more hands to serve an estimated 100 million literate Nigerians. But that is after the on-going revitalization and re-invigoration being introduced by Barrister Adebayo Shittu. “The new NIPOST we are working on will be competitive, responsive and dynamic. It will provide financial inclusion services, real time, on-line, and serve as an internet hub for local communities”, the Minister said recently while unfolding the Road Map for the communications sector.
The new NIPOST envisioned by Barrister Adebayo must attract and retain qualified hands to drive its ICT platform. Such a feat requires that the agency must be run as a modern business entity. NIPOST is currently on the Consolidated Public Service Salary Structure with no special allowance as applicable in similar revenue generating agencies such as NCS and FIRS. Records indicate that NIPOST earned N4.87 billion in 2013, Stamp Duty contributing a mere N870 million. In 2014, after a decade of Stamp Duty Act, NIPOST made N1.036 billion from that sub-head.
Going forward, NIPOST employees have presented a request for “a job-specific-allowance of 50 per cent mark-up on the current salary. It is in that regard and on the need to have a living wage for NIPOST staff that can compare with organizations that have similar mandates and functions that management is proposing an appropriate remuneration. They have the backing of the Minister who has promised to take their case to President Muhammadu Buhari very soon.
Tajudeen Kareem, public policy analyst
— Apr 11, 2016 @ 01:00 GMT
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