The Finance Act, 2019 has resolved the decades-long dispute between regulatory agencies over the power to administer the Stamp Duties Act (SDA) by clearly vesting upon the Federal Inland Revenue Service (FIRS) the exclusive power to impose, charge and collect duties upon instruments that have been executed by companies or between a company and an individual.
Stamp duties is an instrument utilized by governments to raise much needed revenue since their first use in England in the 17th century to raise funds needed to prosecute a war.
Stamp duties were first enacted in Nigeria, preindependence in 1939 and 1954, and included in the compilation of the Laws of the Federation of Nigeria, 1990 and 2004, respectively. Originally, stamp duties were intended to apply to only physical instruments and documents, however, the Finance Act, 2019 has codified its extension to electronic transactions. Both the Central Bank of Nigeria and Nigerian Stock Exchange have endorsed the extension of dutiable instruments to electronic transactions as being in line with global practice and economic realities.
The FIRS recently stepped up to its mandate with respect to the SDA by issuing a Public Notice on 19 July 2020 providing clarification on the application and administration
of Stamp Duties in Nigeria. The Public Notice also urged the public on the necessity to comply with the SDA by paying the appropriate duties on their instruments and transactions. Further, the FIRS provided a short form listing of transactions and instruments and the applicable duty rates as a quick reference point.
The FIRS should be commended for striving to fulfill its statutory responsibilities to administer tax legislation, including the SDA. We believe that further action by the FIRS in this respect will help Nigerian taxpayers to acquire appropriate tax awareness and imbibe the much desired civic responsibility of paying taxes voluntarily, and in a timely
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