FIRS generates N3billion weekly from stamp duty
The Federal Inland Revenue Service (FIRS) yesterday in Abuja said it has been generating N3billion weekly revenue from stamp duty collection from May to date from Deposit Money Banks (DMBs).
Its Executive Chairman, Muhammad Nami told the House of Representatives Committee on Finance during a meeting with the lawmakers of its objective to resolve the face-off between the FIRS and the Nigeria Postal Service (NIPOST) over stamp duty collection and the fate of the N58 billion revenue generated from February 2016 to April, 2020.
The meeting, chaired by the Chairman Finance Committee of the House, Hon. Abiodun Faleke included other members of the committee, the Post- Master-General of the Federation Dr. Ismail Adebanjo Adewusi, NIPOST Chairman Maimuna Abubarkar and other top officials of the postal agency and FIRS.
Meanwhile, the Federal Government has assured of its readiness to provide support for states to recover the backlog of stamp duty from January 15, 2016 to June 29, 2020 and generate more revenue.
Attorney-General of the Federation (AGF) and Minister of Justice, Abubakar Malami (SAN) gave the assurance yesterday during a virtual meeting with the states’ Attorney-Generals, the Chairman, FIR and members of the Joint Task Board.
Nami said the FIRS was able to generate the revenue from a single stream of stamp duty collection from DMBs because it had deployed a new technology to track and capture such revenue straight into the Federation Account.
The technology deployed by the FIRS, Nami said, is the Application Programming Interface (API) technology solution, an online real-time technology that makes collection of stamp duties easier.
Nami said when he assumed office last December, the FIRS discovered over N30 billion in NIPOST Stamp Duty Account with the Central Bank of Nigeria (CBN).
The account was opened in 2016 specifically to warehouse revenue from stamp duty collection.
However, by April 2020, the balance in the account had grown to N58 billion because of the deployment of the API by the FIRS. Money in the stamp duty account by May 2020 was transferred to the Federation Account following instructions given to the CBN by the FIRS to do so.
Since then, both the FIRS and the NIPOST have been at daggers drawn over who controls stamp duty collection and invariably the money which accrues from the collection.
Nami said payment of stamp duties collection dates back to 94 years ago, stressing that stamp duty had always been part of the revenue schedule of tax authority.
He regretted that the differences in who controls stamp duty collection between both NIPOST and FIRS had degenerated to public spat between the two agencies describing the development as “unnecessary and unhelpful”.
According to him, “the FIRS regrets that as agency of the government, FIRS and NIPOST allow a simple situation to degenerate to media exposure”.
In his submission, Dr. Adewusi described the feud between FIRS and his agency as needless.
According to him, “as prelude, it’s important to make these remarks; NIPOST is not a tax collecting agency. We are not in the business of collecting taxes, that’s not our mandate. But our role in stamp duty is clearly stated in the law.
“The issue is, the Finance Act, 2019 did not in any way stop NIPOST from its mandate. In spite of amendment to finance Act, it has not affected the responsibility of NIPOST. There is no fight between NIPOST and FIRS over tax collection.”
He however insisted that the responsibility of procuring stamp rests with NIPOST but appealed that, the agency is entitled to its share of the stamp duty proceeds it collected and domiciled in the CBN fom 2016 to 2020.
He told the committee that “all the monies that accrued to the account include proceeds of stamp sales; in the spirit of peace, we want FIRS to look at the issue. We deserve in sharing cost of collection. At the initial meeting, FIRS said they will give us 30 per cent and take 70 per cent, we said no”.
Earlier in his opening remarks, Hon Faleke said the committee was embarrassed by the open engagement of the two agencies in addressing the issue.
According to him, “as a committee responsible for overseeing finance agencies, we decided to call for this dialogue to see if the agencies are doing the bidding of the law”.
He said having heard presentations by both sides, it would be fool hardy for the committee to just take a decision. “We will go back, look at all legal issues raised and reconvene,” he said.
In a statement, Malami’s media aide, Umar Gwandu said the AGF appealed for the support and cooperation of the states’ Attorney-Generals and the Joint Tax Board on the proposed audit and recovery of backlog of stamp duties from January 15, 2016 to 29th June, 2020.
Gwandu quoted Malam as noting that Section 111 of the Stamp Duty Act provides that ” all duties, fines, penalties and debts due to the Government of the Federation imposed by this Act shall be recoverable in a summarily manner in the name of the Attorney General of the Federation or the State.”
He added that the minister stressed the importance of Paragraph 7, Item B of Part II of the Second Schedule to the Constitution and Section 4(2) of Stamp Duty Act, which empowers State Governments to collect stamp duties in respect of transactions between individuals residing in their respective States.
Gwandu added: “It may be recalled that Federal Government has set up an Inter-Ministerial Committee on the Audit and Recovery of backlogs of stamp duties.
“The committee, chaired by the Office Attorney-General of the Federation and Minister of Justice; Abubakar Malami, SAN was inaugurated by the Secretary to the Government of the Federation, Boss Mustapha on June 30, 2020.
“Membership of the committee were drawn from the Federal Ministry of Finance, Budget and National Planning, Office of the Accountant General of the Federation, Secretary to the Government of the Federation, Revenue Mobilization, Allocation and Fiscal Commission, Nigerian Financial Intelligence Unit, Central Bank of Nigeria and Federal Inland Revenue Serves.
“The Stamp Duties was originally captured in the Stamp Duties Act 1939 (Ordinance 41 of the 1939) and amended by numerous Acts and various resolutions and contained in the Laws of the Federation of Nigeria 2004.
“Recently, the Finance Act 2019 amendment to the Stamp Duties Act, particularly Section 52-56 clearly defined the responsibilities for the administration of Stamp Duties in Nigeria and jurisdiction of participating taxing authorizes, as well as explained that the Federal Inland Revenue is the competent tax authority to administer, assess, collect, and account for stamp duty in the country.”