Administration of Stamp Duties in Nigeria Under The Finance Act - Part 3

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Sunday, September 26, 2021 07:10 AM / by CITN/ Header Image Credit: KPMG Nigeria & EcoGraphics


In the first and second parts of this article that were featured in the previous weeks, we had discussed the general basis for the administration of Stamp duties, dutiable instruments and how to stamp an instrument. Also, time for stamping, exempted products and penalties for noncompliance were covered in the second part. The basic terminologies and other aspects of stamp duties administration in Nigeria will be reviewed  under this part.

 

Conceptual Clarification of Terms

Stamp

Stamp in this concept is referred to as an impressed pattern or mark using an engraved or inked block die or an adhesive stamp or an electronic stamp or an electronic acknowledgement for denoting any duty.

 

Instruments

These include every written document and electronic documents.

 

Denoting

This term is used when the die is impressed or fixed on any document to indicate any duty paid. This shows the amount of duty paid on the instrument at a glance.

 

Embossment

This is the stamping of any document known as an instrument by the use of a die and stamping machine.

 

The Stamp Duty Commissioner

Appointment

The Commissioner of Stamp Duty is appointed to supervise the implementation of the provisions of the Act. The Commissioner of Stamp Duty for the Federal Inland Revenue Service (FIRS) is appointed by the President of the Federal Republic of Nigeria while that of the state is appointed by the Governor of the respective State.

 

Duties/Functions

  • General administration of the Stamp Duties office.
  • Assessment of duties on instruments, including imposing of penalties and interest where applicable.
  • Custody of all stamping materials including dies and stamps.
  • Stamping, embossing of instruments and signing of the Instruments so stamped.
  • Tax education for duty payers.
  • Accounting for duty collected.

 

Manner of Denoting Stamp Duties

The stamping of documents can be done either by embossing die; affixing an adhesive stamp, or affixing a postage stamp in place of adhesive stamps or printing on the instruments.

 

Section 5 of the Stamp Duties Act provided the following forms or methods by which stamp duties may be denoted:

  • Employing a die impressed on an instrument as an adhesive stamp;
  • Affixing printed adhesive stamps (issued by the Service) on instruments;
  • Direct electronic printing or impression on the instrument;
  • Electronic tagging;
  • Issuance of stamp duties certificate;
  • Any other form of acknowledgement of payment for stamp duties adopted by the Service.

 

Note: The consequence of stamping an instrument with an adhesive stamp is such that an instrument must be stamped on or before its execution unlike in the case of impressing stamp which could be stamped within a specified period after execution.


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Electronic Stamp Duties

E-Stamping is an electronic process of stamping instruments or documents upon payment of the approved duties electronically and generating the receipt of payment without coming in contact with tax officials.

 

Procedure for e-stamp duties payment to FIRS

Steps

How To Pay For E-Stamp Duties For FIRS (Procedure)

Step 1

Visit www.firs.gov.ng, click on e-services, also click on e-stamp duty. After that click on sign up here. Create your account or log in using your existing account details on ISDS.  Use your email ID preferably for username.

Step 2

Search and select the stamp duty instrument from the list of services and rates menu or MDA menu.

Step 3

Provide details of the transaction by completing the relevant fields including TIN and transaction amounts. The Tax Identification Number (TIN) of all parties involved in the transaction will be required

Step 4

View the summary page for correctness.

Step 5

Make payments using any of the payment options. E.g. Debit cards, Credit cards, Pay at bank etc.

Step 6

Upon successful payment, ISDS will forward an electronic copy of the Stamp Duty Certificate to the current logged-in email address of the user.

Step 7

Log out or continue to process another stamp duty transaction.

 

Advantages of E-Stamping

  • It is faster, simple and easy to administer.
  • It enhances accuracy.
  • It eliminates corruption through human involvement.
  • It promotes voluntary compliance.
  • It is cost-effective.

 

A duty-payer can at any time and on any day pay his duty, print and re-print his payment E-receipt at the comfort of his room.

 

Disadvantages of E-Stamping

  •  It is not user friendly to uneducated taxpayers
  • The ICT infrastructural challenge of internet connectivity can easily affect e-stamping and lead to loss of revenue.
  • Risk of being hacked using an e-payment system.
  • The challenge of transferring money between different e-payment gateways.
  • Dispute on transaction failure; where duty payers' account might have been debited while the FIRS' account has not been credited electronically.

 

Please watch out next week for the final and concluding part of the review of the Administration of Stamp Duties in Nigeria.

 

Download Here - Finance Act 2020

 

Related Links

Administration of Stamp Duties in Nigeria Under The Finance Act - Part 2 - Sep 10, 2021

Administration of Stamp Duties in Nigeria Under The Finance Act - Sep 03, 2021

 

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Related News on Stamp Duty

  1. State Attorney Generals Sue AGF Over Stamp Duty Administration
  2. Administration of Stamp Duties in Nigeria Under The Finance Act - Part 2
  3. Administration of Stamp Duties in Nigeria Under The Finance Act
  4. FHC Upholds the Illegality of Stamp Duty Deductions Prior to Amendment of the SDA
  5. Revision of Stamp Duty on NSE Transactions to 0.08% from 0.075% Effective 7th December 2020
  6. Much Ado About the FIRS' 6% Stamp Duty on Leases
  7. Oil Marketers Kick Against N50 Stamp Duty
  8. Merchants Prohibited From Assessing Any Duty or Costs Characterised As Stamp Duty On Consumers
  9. Government Reviews Stamp Duty Charge
  10. Financial Services Agents Call On CBN To Address Stamp Duty Charges
  11. RMAFC Set to Audit Deposit Money Banks Over Stamp Duty Collections
  12. Stamp Duty Under the Banking System
  13. N50 Stamp Duty: Banks begin execution, lists exemptions but still have many issues unanswered
  14. FIRS Provides Clarifications on Administration of Stamp Duties in Nigeria

 

 

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