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Illegal Stamp Duties On Bank Deposits And Unlawful Increase Impersonal Taxation Rates

Source: Olufemi A. Adegunwa
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I absolutely agree with those that claim that the Central Bank of Nigeria [CBN] directive that banks should deduct N50 from every deposit of over N1, 000 made into certain accounts is illegal and unconstitutional. The Stamp Duties Act is the fundamental legislation on stamp duties in Nigeria.

Stamp duties are included under the Exclusive Legislative List of the Nigerian Constitution, thus no state or body apart from the National Assembly can make laws on Stamp Duties. Nevertheless, some states such as Lagos and Ekiti states have enacted Stamp Duties Laws; unfortunate exercises in willful illegality!

The Stamps Duties Act lists all the documents and transactions upon which stamp duties are to be paid. The CBN or the Federal Inland Revenue Services[FIRS] or NIPOST or the Minister of Finance cannot amend, alter, add to or change the Stamp Duties Act and any of its schedules[and lists] by way of directive, circular or any other action, neither can they introduce and impose a new tax or vary/alter a statutorily stipulated rate of taxation.

The new stamp duties charges imposed by way of circular and directive do not form part of the documents and transactions listed in the Stamp Duties Act as those that attract payment of stamp duties. The new charges of N50 per deposit over N1, 000 on certain accounts has no basis in law, by statute or by court judgment.

There is no court judgment at all that categorically authorizes the CBN, the FIRS or any other body or office to impose and collect stamp duties of N50 on deposits over N1, 000 into certain accounts and to amend, vary or alter the Stamp Duties Act. No truly learned and honest judge would grant such an obviously illegal, unlawful, null and void judgment. If the CBN, the FIRS, NIPOST or the Minister of Finance believe that any such court judgment exists, they should publish the complete judgment in full on their official websites.

Only the National Assembly, with the consequential assent of the President, can amend the Stamp Duties Act, and other acts such as the Personal Income Tax Act [PITA], Companies Income Tax Act[CIT], etc. The CBN, the FIRS, NIPOST or the Minister for Finance cannot take over the law making functions of the National Assembly. They must be called to order.

Additionally, any increment by the FIRS or the Joint Tax Board or the States Board of Internal Revenue [SBIR] or Technical Committee of the State Board or Local Government Revenue Committee or Joint State Revenue Committee or any other person or authority over and beyond the rates of tax set out in the PITA is illegal and unlawful. The unfortunate situation where some SBIR have been increasing the tax burden on residents far beyond the rates stipulated in the PITA is a flagrant and arbitrary exercise in illegality.

There is nothing wrong in the drive for a more efficient tax collection and payment regime and the bringing of more people inside the tax net, but this should be done legally in obedience of applicable legislation. Nigerian Trade Unions, professional bodies, human rights lawyers, lawyers in academia, professional associations, etc, should be more alive to their social responsibilities and duties, and also the many SANs that are quick to display solidarity with colleagues facing criminal charges.

Nigerians that have been overcharged or illegally charged have the right under the law to appeal to tax tribunals and tax appeal commissioners for relief and refunds. Nigerian tax authorities should follow the law and execute their functions in a lawful, legal, constitutional, proper and legitimate manner.

The National Assembly, especially the Senate, should intervene by summoning the Minister of Finance, the CBN Governor, the Executive Chairman FIRS, the Postmaster General or Chairman NIPOST, etc, to publicly explain the role their offices may have played in illegal tax increases and unlawful imposition of stamp duties with which they are bedeviling Nigerians. President Muhammadu Buhari should urgently see to it that Nigerians are not burdened with illegal stamp duties charges and taxes.

OLUFEMI A. ADEGUNWA

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