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Nigeria: Rules to clarify application of stamp taxes

Nigeria: Rules to clarify application of stamp taxes

The Federal Inland Revenue Service (FIRS) issued a release to provide clarifications on the administration of stamp taxes (duties) in Nigeria.


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The guidelines provided by the FIRS include the following clarifications:

  • Stamp tax is applicable on all “dutiable” instruments such as agreements, contracts, receipts, memoranda of understanding, promissory notes, insurance policies, and other stipulated instruments.
  • The Finance Act, 2019 expanded the scope of the stamp tax measures to include technology, e-commerce, and cross-border transactions.
  • Stamp tax is chargeable on both physical and electronic dutiable instruments, either as a fixed sum or a percentage of the consideration on the instrument.
  • The competent authority is authorized to impose, charge, and collect stamp tax on all dutiable instruments executed between a company and an individual. The state tax authorities are only authorized to collect stamp tax on instruments executed between individuals. The FIRS is the relevant tax authority to collect stamp tax on all banking transactions, even when the parties thereto are individuals, and in particular, with regard to electronic fund transfers.
  • A fixed-rate of ₦50 applies regarding the adhesive stamp to apply on all receipts. Also, electronic transfers above ₦10,000 through the money deposit banks (MDBs) will attract a stamp tax of ₦50 that the MDBs must remit to the FIRS.
  • Stamp taxes due to the federal government and collectible by the FIRS are to be remitted into the FIRS stamp duties account with the Central Bank of Nigeria, while the stamp taxes due to state governments are to be remitted to the stamp duties accounts of the states.
  • The burden of payment of stamp taxes on contracts and bank transfers is that of the beneficiary of the contract and the customer who initiated the transfer, respectively.  The party making the payment is required to account for the stamp taxes applicable on the transaction. Therefore, ministries, departments, agencies, landlords, and other executors are deemed to be collection agents for stamp tax purposes and are required to determine that their service providers, contractors, tenants, etc., pay the applicable amount of tax on the relevant instruments.
  • The postage stamp administered by the Nigerian Postal Service (NIPOST) for delivery of goods does not denote stamp tax duties and, therefore, is not a substitute for the FIRS adhesive stamp.
  • A failure to deduct or remit stamp taxes into the appropriate account will be subject to penalty and interest assessments.

Read a July 2020 report [PDF 159 KB] prepared by the KPMG member firm in Nigeria

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