The stamp duty policy has deepened the contradictions in its implementation as the Nigerian Postal Service (NIPOST) and the Federal Inland Revenue Service (FIRS) are waiting to see who blinks first. DAVID AGBA reports.
Going down memory lane, while the Federal Inland Revenue Service (FIRS) contends that it has sole responsibility for the collection of all taxes and duties in the country, the Nigerian Postal Services (NIPOST) insists it is the repository of stamps.
Stamp Duty
Stamps are the historical products from which emanated stamp duties introduced into the country for the first time on April 1, 1939 by the British Colonial Government through the Ordinance 15, 1939.
The Central Bank of Nigeria (CBN) had through a circular directed the banks to deduct N50 for stamp duty on lodgment transactions worth at least N1,000. However, NIPOST is seeking to know where this directive leaves it as the traditional custodian of the proceeds from stamps and thus, the stamp duty.
Federal government imposition
The FIRS, however, contends that it should superintend over the stamp duty fee collection as it has always done over other duties and taxes imposed by the federal government. The tax agency takes four per cent of the proceeds of the taxes and duties it collects as the cost of collection.
Action
Also, NIPOST says it has taken actions to address the legal contradictions contained in a circular published by the Federal Inland Revenue Service.
The contention between both agencies over the custodian of stamp duty reared its head after the implementation of the Stamp Duty Act.
NIPOST insists that it is empowered with the statutory power to print, mint, produce, retail, and provide adhesive postage stamps.
FIRS portal
In a recently released circular, the FIRS said it now has a portal for automated stamp duties collection; where all stamp duties paying citizens, government agencies, institutions, private organisations, including banks, should log into and pay stamp duties.
NIPOST, however, opposed the move by FIRS.
A statement by NIPOST management read, “The Nigerian Postal Service (NIPOST) wishes to draw the attention of the general public to the aforementioned circular issued by the Federal Inland Revenue Service (FIRS) and hereby inform the public that the Nigerian Postal Service has observed several legal contradictions contained in the Finance Act 2019, the basis of the circular”.
“We, however, wish to allay the concerns of the general public that NIPOST has taken steps to ensure that the legal contradictions are addressed by the appropriate authorities.
“The statutory powers of NIPOST to print, mint, produce, retail, and provide adhesive postage stamps for the use of Nigerians to comply with the stamping protocol remains intact.”
Both agencies have been laying claims to Stamp Duty collection since 2019.
Finance Act 2019
The FIRS had said the Finance Act 2019 conferred on it the exclusive right to collect stamp duty on behalf of the federal government.
But NIPOST countered this by saying the Act contains some “contradictions”, which should be addressed by appropriate authorities.
Office of the Accountant-General
The postal agency said the Office of the Accountant-General had also issued a circular to NIPOST on the collection of both physical and electronic stamp duty of N50, maintaining that there is no conflict between NIPOST and FIRS in the collection of stamp duty.
The postal agency said it is statutorily empowered to collect stamp duty and it would not give up its right on it.
Minister of Finance
But, the Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed announced last December that FIRS will automatically become an agency to collect the stamp duty following the passage of the 2019 Finance Bill by the National Assembly which contains an amendment to Stamp Duty Act.
Before now, following the implementation of the Stamp Duty Act by banks operating in the country, the Nigerian Postal Service was to be classified as a revenue-generating agency.
By this classification, NIPOST was to join the elite club of government agencies that are members of the Federation Accounts Allocation Committee (FAAC).
About N2.5 trillion was expected to be generated from stamp duties on financial services industry transactions per annum.
The membership will enable NIPOST to attend the monthly FAAC meetings as well as post-mortem meetings where revenues accruing to the nation are analysed and shared among the three tiers of government.
Agencies that are members of FAAC, which state governments attend, include the Nigerian National Petroleum Corporation, Federal Inland Revenue Service, Nigeria Customs Service and the Revenue Mobilisation Allocation and Fiscal Commission.
Findings had then shown that the contentious issue of the role of the FIRS had been resolved in favour of NIPOST as it had been established that the fund was a duty rather than tax that the FIRS superintends over.
This however, did not see the light of day as the battle still rages on till date with the FIRS having an upper hand.
To determine what percentage of the stamp duties to be retained by NIPOST as the cost of collection, a technical committee was established and chaired by the Revenue Mobilisation, Allocation and Fiscal Commission. Membership of the committee was drawn from the CBN, NIPOST, RMAFC and Office of the Accountant-General of the Federation.
Minister of Communication and Digital Economy
Meanwhile, Minister of Communication and Digital Economy, Mallam Ali Pantami, had insisted that it is the duty of NIPOST to collect Stamp Duty for the federal government instead of the Federal Inland Revenue Service, saying it is selfish and an injustice trying to deny NIPOST of collecting the duty
He argued that Stamp Duty should be collected by NIPOST the way Customs Duty is collected by the Nigerian Customs Service (NCS).
Pantami, who stated this in Abuja, regretted that the FIRS has been working to be the agency collecting the duty, adding that he had presented the case to the President that Stamp Duty should be collected by NIPOST and that there is no harm if FIRS supports them and they work harmoniously but that collection of the duty should not be done by FIRS or the Ministry of Finance because there is no justification for that.
Case before President
He said, “The crisis started before my appointment as the minister and I was not briefed on time about the real situation, but when I heard about it, I intervened and I presented the case to the President that Stamp Duty should be collected by NIPOST. There’s no harm if FIRS supports them and they work harmoniously, but that FIRS or the Ministry of Finance should not do a collection of the duty because there is no justification for that. Stamp Duty should be collected by NIPOST the way Customs duty is collected by the Nigerian Customs Service (NCS).
“We insist, but we have no power to change, but we have the power to challenge injustice. And as far as I am concerned, this is one of the many injustices that should be challenged. We insist that stamp duty should be collected by NIPOST and it is an injustice if NIPOST is denied the opportunity. We have advised the government on this and the government has the final say on it, but we insist that NIPOST is the right agency to do that.”
Elsewhere
UK, Australia and other advanced economies have the stamp duties running. Some countries tag it revenue stamp, alongside adhesive postage stamp, but the production of both emanate from the postal agencies of these countries to avoid the overlapping of functions.
This said, it is congruent on both the FIRS & NIPOST and whosoever is concerned to ensure that both complement each other and see how the two government agencies will harmonise their roles in the stamp duty, that is, one is to implement while the other is to print as stipulated by the law.
P&T
Before now, NIPOST & NITEL created out of old P&T, worked harmoniously. NITEL today is six feet under the ground, while multinational telecommunications companies like MTN, GLO, AIRTEL and a host of others are having a filled day. One of Nigeria’s national heritages is lost.
No doubt, there are more lines in operation now, but the argument is the national patrimony is lost and in no time, if the problem is not addressed, NIPOST might be pilloried down the abyss.
The federal government should intervene in this case and broker settlement.
