An Inter-Ministerial Committee on Audit and Recovery of Back Years Stamp Duties was inaugurated Tuesday in Abuja. A government desperate for funds in the face of covid-19 and dwindling revenues from oil, and which now hopes to make taxes its honey pot, is betting on stamp duties.
Secretary to government of the federation Boss Mustapha, who represented President Muhammadu Buhari on the occasion, said government has been assured “that the collection from stamp duty will be second to oil revenue, as it has the potential to yield up to a trillion naira if properly harnessed”.
ENTER EMAIL TO DOWNLOAD FREE EBOOK
Send download link to:
The assurance must have come from the Federal Inland Revenue Service whose executive chairman Muhammad Nami had listed stamp duty as a top revenue generator, early in the year. In a chat with journalists to mark his first 100 days in office, in April, Nami said it would be made “the goose that lays the golden egg for the federal government”.
It’s not postage stamp, he said at the time, but a tax on transactions, manual or electronic, of N10, 000 and above. N50 might be considered a small sum, but Nami reminded Nigerians that if unremitted stamp duty on chargeable transactions from year 2000 were calculated, it would yield as much as N20trillion.
FIRS on Nami’s watch is about to deploy “cutting-edge technology” to drive the process of collecting this “flagship tax” that has the potential to yield trillions of naira.
He said then: “The good news is that stamp duty has the potential to yield tax revenue in trillions of naira. Presently, there are claims from many quarters that if the records of stamp duty on chargeable transactions as far back as the year 2000 are revisited, as much as N20trillion unremitted stamp duty revenue are due from agencies charged with collecting it on behalf of the federal government.“
At the Abuja event this Tuesday, during which the FIRS Adhesive Stamp was also launched, Nami said FIRS has collected N66billion in the first five months of 2020 alone. He attributed the increase this year to the dynamism prompted by Finance Act 2019, sums warehoused by the CBN in respect of prior years, the deployment of technology, and stakeholders’ collaboration. “The introduction of the FIRS Stamp Duties Adhesive Stamp will, among other things, plug the revenue sink-hole, enable proper accountability and transparency, simplify administration of stamp duties, and reduce disputes,” he stated.
SGF Mustapha said: “In the face of dwindling oil revenue, and the global shift away from oil-dependent technological products, it is even more compelling now to begin to think out of the box in order to safeguard the future of our country. Therefore, this administration has resolved to widen the revenue base by activating stamp duties revenue collection which has been neglected for more than 20 years. I hereby also direct and request that all relevant MDAs, particularly the Central Bank of Nigeria, NIBBS, MDBs, FIRS, NIPOST should give maximum cooperation to the committee [on Audit and Recovery of Back Years Stamp Duties] in the discharge of its mandate.”
The collection, for a start, will cover the past five years, from 2015.
To ensure transparency and accountability in the recovery of the backlog, the president’s representative directed that all recoveries made by the committee be remitted to the appropriate stamp duty account maintained by government with the Central Bank of Nigeria.
Leaders of the National Assembly – Senate president Ahmad Lawan and House speaker Femi Gbajabiamila – pledged their support. So did minister of finance, budget, and national planning Zainab Ahmed: she noted that stamp duty opens untapped revenue sources for increased revenue collection and admitted the role of the adhesive stamps in enhancing voluntary compliance by taxpayers.
FIRS is given a target to meet each year, no matter the shape of the economy or the purchasing power of Nigerians. Its target for 2020 is N8.5trillion.