“Any electronic receipt for, or electronic transfer of money deposited, with any bank, or with any banker in any type of account of an amount from N10,000 upwards, shall attract a singular, or one-off duty of the sum of N50” – FIRS.
For a while now, Nigerians have noticed N50 deductions, from their accounts.
These are deductions for Stamp Duty charges, which they, almost, do not get alerts, or heads-up on.
What is the Stamp Duty About?
Stamp duty gets levied, by the government on specified transactions and documents.
Under the Stamp Act, the central government can levy stamp duty on some instruments, like bills of exchange, cheques, promissory notes, transfer of shares, etc.
The government is, already, empowered to levy stamp duty on some specific instruments.
It, also, fixes the rates for these instruments. The Stamp Acts – central as well as the State Acts – specify the rates of duty, for different documents.
In line with generating revenue internally for the country and to ensure that, the Central Bank of Nigeria’s decision on a cashless policy is adhered to, a circular got released by CBN on September 17, 2019, which was immediately effected.
The new Finance Act disclosed that the N50 stamp duty charge, would now get levied on electronic payments above N10,000, as against payment above N1,000.
The Finance Act was initiated by the Federal Government, to revamp tax administration in the country, through the introduction of various tax laws.
In essence, the charges are not imposed by the banks, but by the Federal Government, through the CBN.
The banks are only a channel for collecting and remitting the amount to the Federal Government.
Nigerians are beginning to avoid transactions, via Point of Sales (PoS) terminals.
Customers now avoid ePayment platforms, in preference for cash deals.
This has created a big gap in the Federal Government’s financial inclusion drive and in particular, the CBN’s decision to infuse the cashless policy, a move it said would eliminate the risk of carrying cash around and reduce the cost of printing Naira notes.
The effect of the N50 charge, already implemented by fuel stations and supermarkets in Lagos, has become a burden and a source of worry to merchants as well.
Let us also bear in the mind the numerous charges associated with financial transactions. From the N50 monthly card maintenance fee to the ATM interbank N65 fees one is charged, after third withdrawals via ATM, the N4 for SMS alert.
This including unsolicited ones for birthday wishes, national and international day celebrations and operational updates and the graduated fee scale for electronic transfer services.
Some banks also collect as much as N4,000 for hardware token, N4 for one-time-pin (OTP) SMS charge, as well as N20 per page for bank statement of account collection.
All these have culminated into questions of whether the government truly cares about the welfare of citizens; if the necessary bodies thoroughly gave thoughts to their decisions, before implementation; whether this is not a case of biting oneself in the face; and the good old worry about corruption.
More so, as the Nigerian Senate has ordered an investigation into the failure of the CBN to remit over N20 trillion Naira, generated from stamp duty charges collected from banks and other financial institutions, from 2016 till date, into the Federation Account.
As it stands, there is the need for meetings among stakeholders, as it appears that the timing for this development is not now.
If this would, however, remain the mode of operation, perhaps some form of easing-into and re-working the modalities of operations would help.
Featured Image: oasdom
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