How Buhari’s N50 charge, Stamp Duties Act (SDA) will affect you
By Ahmed Musa Husaini
Origin
The Stamp Duties Act was in existence since colonial era. The present one was first promulgated in 1990 and reviewed in 2004. In the past, attempts to enforce it have all failed. From 2004 upward, the CBN had issued three circulars on its enforcement without any positive result.
What has changed?
Much have changed. Although the law has been in place, what was lacking was the enforcement culture. Government is now determined to enforce all financial laws and regulations in order to shore up revenue and prevent leakages.
What does it cover?
It covers any note, memo or writing whereby any amount of money (in excess of N4.00) is acknowledged or expressed to have been received, deposited or paid.
How does it affect you?
A financial transaction levy of N50 is deducted on any receipt via electronic payment, cash or cheque in excess of N1,000. Note that N50 is deducted NOT on every N1,000 but on every transaction in excess of N1,000 whether it is in millions or billions.
Are there exemptions?
Yes. It does not include self-to-self transfer whether intra or interbank, and it also exempts transfers and withdrawals involving savings accounts that are used by majority of low income Nigerians.
Is it a Nigeria-only practice?
No. It is a global practice that has been in place (to varying applications) in many countries.
Benefits
If fully enforced, the SDA has the potential to generate over N2 trillion annually of which only about N50 – N100 billion will come from the N50 cash receipts. The rest will come from stamp duties on shares, bonds and property purchases. It is also capable of generating between 100,000 – 300,000 jobs in the postal service sub-sector.
Legal implications
Receipts not backed by duty stamps are not legally recognised and are therefore not acceptable as evidence before the courts.
NewsroomNG does not necessarily share, or endorse, Husaini’s views on this issue..
