The attention of FIRS has been drawn to the public advertisement issued by the Nigerian Postal Service (NIPOST) published in THISDAY Newspaper of Tuesday, 9th March, 2010 on the matter of Stamp Duties administration the and specifically as it relates to Contract notes. Contrary to the impression created in the publication to the effect that the major controversial issues had been resolved at an earlier intervention meeting held between FIRS and NIPOST at the Office of the Accountant General of the Federation, (OAGF) Abuja, the FIRS wishes to use this medium to put the records straight and further educate the general public on the responsibilities of the two agencies on the matter of stamp duty administration.

 

2.            FIRS hereby wishes to reiterates its earlier position that Stamp Duties Act No S.8 LFN 2004 has imposed the responsibility to impose, charge or collect duties with respect to legal documents between corporate entities on behalf of the Federal Government, a function that is currently being exercised by only the Federal Inland Revenue Service. This function is supported by section two (2) and the first schedule of the FIRS Establishment act, which specifically included Stamp Duties as one of the taxes collectible by the organization.

 

3.            The provisions in the Stamp Duty Act which prescribe that stamp duties on certain categories of documents e.g. Agreements, Contract Notes etc, could be denoted by adhesive stamps (where duty payment is less than N10) is a demonstration of government concern for cost efficiency achievable through lower compliance cost and minimal cost of administration. This arrangement of convenience does not in itself imply the ceding of FIRS stamp duties collection responsibility to any Agency. The responsibility for stamp duty collection is solely vested on FIRS. With specific reference to the collection of duties on contract notes, FIRS is to collect all stamp duties payable through the Commissioner of Stamp Duties, while NIPOST engages in the supplies of adhesive stamps where the duty payer excises the option to do so.

 

4.            FIRS is particularly disturbed over the practice whereby NIPOST is engaged in the assessment and collection of contract Stamp fees, calculated at the rate of 0.075% on value of shares traded, rather than limit itself to the sale of postage stamps. The Agency had claimed that these fees represent the expected proceeds from sale of adhesive stamps, which should have been affixed on each contact note executed. The rate of 0.075% being charged was based on a circular issued by the Security and Exchange Commission (SEC), rather than the provision of the Stamp Duty Act. FIRS is unhappy about this action of NIPOST in this connection and the issue of multiplicity of taxes that this has generated, thereby further complicating the operating tax environment.

 

5.            For the purpose of clarity, it is important to emphasize that Federal Inland Revenue Service (FIRS) remains the only Agency of the Federal Government, vested with the responsibility for administering the Stamp Duties Act, being a revenue collecting agency and this responsibility has not been ceded to any other Agencies .The general public is hereby enjoined to adhere strictly to the provisions of the law in relation to the payment of stamp duties as earlier clarified in the FIRS publication contained in the Punch and Nation Newspapers of 6th October, 2009.

 

6.            To this end, all corporate entities engaged in stockbrokerage and related activities are advised to disregard any ad valorem duty assessments being imposed on them by the NIPOST establishment with regards to contract notes as FIRS is the only relevant Agency vested with the responsibility to collect stamp duties on such category of documents.
 

SIGNED:
Ogungbesan, S. S
Ag. Coordinating Director
Tax Operations Group (TOG)
For: Executive Chairman,
Federal Inland Revenue Service
Headquarters, Abuja