Merchants Prohibited From Assessing Any Duty or Costs Characterised As Stamp Duty On Consumers

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Wednesday, December 25, 2019 02:40PM / by Federal Competition and Consumer Protection Commission/ Header Image Credit: @fccpcnigeria                


In recent times, there has been significant contention with respect to merchant imposed N50 stamp duty assessments on consumers for transactions. This imposed fee is supposedly a pass through for onward transmission as a government mandated surcharge.

 

The Federal Competition and Consumer Protection Commission (FCCPC) has robustly engaged the Central Bank of Nigeria (CBN) on this issue, pursuant to $.17 (b), (f), (g), (i) of the Federal Competition and Consumer Protection Act (FCCPA), including meetings of the highest levels of leadership of both regulators. The FCCPC's strongly held position was that an assessment imposed on merchants necessarily is a component of their cost of doing business, and may only be directly passed on to consumers in limited circumstances.

 

For many reasons, including and particularly the CBN's effort to promote a cashless economy, the merchants' response of imposing this assessment on consumers was not only inconsistent with the underlying policy, but also counterproductive and burdensome on consumers.

 

Businesses, by their very nature, already capture the operating cost price of their goods and services. To impose an additional fee on consumers that is exclusive of price and discriminates based on the selected mode of payment essentially amounts to a penalty for the adopted mode of payment.

 

The problems associated with carrying excessive cash in order to avoid a penalty are myriad and multifaceted.

 

Accordingly, the Commission welcomes the CBN's definitive statement on December 23rd, 2019, clarifying its September 17, 2019 directive by Circular Ref. PSM/Dir/CON/02/015 that the directive did not intend to pass such fees to consumers. This makes it inappropriate and illegal for businesses to pass a stamp duty cost of doing their business to consumers.

 

Effectively, and in furtherance of this clarification, merchants are now prohibited from penalising or otherwise assessing any duty, costs or assessment characterised as "stamp duty" on consumers who select point of sale options to conclude their purchases or transactions.

 

The Commission hereby provides this guidance pursuant to S. 18 (2) FCCPA and prohibits any such assessments pursuant to S. 18 (a), (e), (f) and (h).

 

In addition to the provisions above, such assessments may be in violation of other extant provisions and law, including S. 129 (1) (a) and (2). The Commission, in collaboration with CBN, other relevant regulators and law enforcement authorities, intends to enforce the law to its fullest extent and invites consumers to report violations (when they occur) with evidence of such violations.

 

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Related to Stamp Duty

  1. Government Reviews Stamp Duty Charge
  2. Financial Services Agents Call On CBN To Address Stamp Duty Charges
  3. RMAFC Set to Audit Deposit Money Banks Over Stamp Duty Collections
  4. ASHON Seeks The Abolition Of Contract Stamp Duty In Nigeria's Capital Market
  5. Stamp Duty Under the Banking System
  6. N50 Stamp Duty: Banks begin execution, lists exemptions but still have many issues unanswered
  7. Controversy trails stamp duty collection in stock market
  8. Stamp Duties on Bank Deposits and Transfers: Are There Unresolved Issues?

 

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  3. FCCPC To Host Town Hall Meetings With Electricity Consumers in Lagos
  4. Mergers And Acquisitions Now Under The Joint Purview Of SEC and FCCPC, Till Further Notice
  5. SEC, FCCPC Issue Joint Advisory And Guidance On Mergers,Acquisitions and Other Business Combinations

 

 Proshare Nigeria Pvt. Ltd.

 

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