In response to requests by some taxpayers seeking clarification on the current administration of Stamp Duties Act in Nigeria, the Federal Inland Revenue Service (FIRS) hereby provides the following clarifications to guide taxpayers and the general public:
1.Stamp Duty is a tax payable in respect of dutiable instrument as provided under the Stamp Duties Act, CAP S8, LFN 2004 (as amended). Such instruments include Agreements, Contracts, Receipts, Memorandum of Understanding (MOU), Promissory notes, Insurance policies and others stipulated in the Schedule to the Stamp Duties Act.
2.Origin/Background of Stamp Duties in Nigeria: – Stamp Duties came into effect as a result of Ordinance 41 of 1939. The Stamp Duties Act has undergone several amendments over the years up to the Finance Act of 2019. The most recent amendment recognised technology, e-commerce and cross border transactions in line with global practice and current economic realities.
3.Chargeable transactions and rates: – Stamp Duty is chargeable on both physical and electronic instruments in two ways i.e. Ad-valorem:- where duty payable is a percentage of the consideration on an instrument; or Flat Rate:- where a fixed sum is chargeable irrespective of the consideration on dutiable instrument or document.
4.Chargeable Transactions & Rates
Name Type Rate Extra Copy
Appointment of Receiver Flat Rate ₦500.0 N50.00
Appointment of Trustee or of Attorney Flat Rate ₦500.0 N50.00
Appraisement or Valuation of Property Ad Valorem 1.5% N50.00
Bank Cheque Per Leaflet N1.00 per leaflet (Premium) Flat Rate ₦1.0
Bank Deposit/Transfer Flat Rate ₦50.0 N100.00
Bill of Sale Ad Valorem 1.5% N50.00
Bonds (Mortgage) Ad Valorem 0.375% N50.00
Certificate of Occupancy, Partnership Flat Rate ₦1000.0 N50.00
Contract Agreement Ad Valorem 1.0% N50.00
Contract Notes Ad Valorem 0.08% N50.00
Debenture Ad Valorem 0.375% N50.00
Deed of Assignment Ad Valorem 1.5% N50.00
Deed of Gift Ad Valorem 1.5% N50.00
Deed of Release/Surrender/Discharge Ad Valorem 0.075% N50.00
Deeds of Conveyance or Transfer on Sale of Property Ad Valorem 1.5% N50.00
Discharge or Release Ad Valorem 0.075% N50.00
Documents from Ministries and Parastatals (Letter from Legal Adviser of the Ministry of Parastatals required) Non-Chargeable Free N0.00
Gift (Land) Ad Valorem 1.5% N50.00
Goodwill Debenture, Settlements Ad Valorem 0.375% N50.00
Guarantor’s Form ( For Loan Application) Flat Rate ₦500.0 N50.00
Insurance Policy/Policies Ad Valorem 0.075% N50.00
Joint Venture Agreements Flat Rate ₦500.0 N50.00
Legal Mortgage Ad Valorem 0.375% N50.00
Legal Mortgage (Upstamping) Ad Valorem 0.375% N50.00
Loan Agreement Ad Valorem 0.125% N50.00
Loan Agreement (as accompanying document to a mortgage/debenture) Flat Rate ₦500.0 N50.00
Marketable Securities Ad Valorem 2.25% N50.00
Memorandum and Articles of Association (Alteration of memo) Flat Rate ₦500.0 N500.00
Memorandum of Understanding (Related to Land, Sales, Joint Venture,. Surrender, Subdivision Agreements) Ad Valorem 1.5% N50.00
Memorandum of Understanding (Related to Ordinary agreements) Flat Rate ₦500.0 N50.00
New Company Registration (Government Organizations Only) Flat Rate ₦500.0 N50.00
Notaries Act Flat Rate ₦500.0 N50.00
Oath and other affiliates bodies relating to above Flat Rate ₦500.0 N50.00
Oaths, Affidavit-Affirmation, Statutory Declaration, Agreement (Memo of Handwritten) Ordinary Flat Rate ₦500.0 N50.00
Ordinary or Open Agreement Underhand Articles Flat Rate ₦500.0 N50.00
Power of Attorney – Revocable/not land related Flat Rate ₦500.0 N50.00
Power of Attorney (Irrevocable/Land Related) Ad Valorem 1.5% N50.00
Power of Attorney (POA not relating to sales, conveyance, transfers of any landed property ) Flat Rate ₦500.0 N50.00
Promissory Notes of Ordinary Documents/I.O.U Ad Valorem 0.1% N50.00
PROXY FORM Flat Rate ₦500.0 N50.00
Sales Agreement Ad Valorem 1.5% N50.00
Settlement of any Instrument Ad Valorem 0.375% N50.00
Share Increase Ad Valorem 0.75% N50.00
Share Increase (Pre-Incorporation) Ad Valorem 0.75% N50.00
Share Reduction Flat Rate ₦500.0 N50.00
Share Reduction (Pre-Incorporation) Ad Valorem 0.75% N50.00
Share Transfer Non Chargeable Free N0.00
Share Transfer (Pre-Incorporation) Ad Valorem 0.75% N50.00
Shipping Agreement Non Chargeable Free N0.00
Surrender, Bills of Exchange Ad Valorem 0.1% N50.00
Tenancy/Lease Ad Valorem 6.0% N50.00
Vending Agreement Ad Valorem 1.0% N50.00
Will Flat Rate ₦500.0 N50.00
5.Administration of Stamp Duties in Nigeria
i.Section 4(1) of the Stamp Duties Act provides that the Federal Inland Revenue Service shall be the only Competent Authority to impose, charge and collect duties upon instruments if such instrument relates to matters executed between a Company and any person.
ii.Section 4(2) of the Stamp Duties Act provides that the relevant tax authority of a state shall collect duties in respect of instruments executed between individuals.
iii.In respect of banking transactions, the FIRS is vested with the powers to collect stamp duties on all banking transactions.
iv.As such, the powers given to the State Government through their respective revenue authorities to administer stamp duties by ensuring the assessment, collection and accounting for stamp duties between individuals into the State Government revenue accounts does not include banking transactions.
v.The Stamp Duty Commissioner is appointed by the relevant tax authority (either Federal or State) as prescribed by jurisdictional authority to administer the Act. The function of the Commissioner is to administer the provisions of the Act and to supervise the Stamp Duties office; adjudicating/assessment, stamping, the imposition of penalties where necessary, ensuring the security of stamped instruments, and accounting for duties collected.
6.Payment and remittance of stamp duties on receipts:-
A fixed-rate of N50 FIRS adhesive stamp is applicable in respect of all receipts. A N50 Stamp Duty is also due from customers in respect of electronic transfers done by them through the Money Deposit Banks (MDBs) in Nigeria where the transfer is N10,000 and above. The MDBs have the obligation to deduct and remit the stamp duties due on such transactions.
7.Remittance of Stamp duties
Money Deposit Banks shall remit stamp duties collected on behalf of the FIRS into the FIRS Stamp Duties Account with the Central Bank of Nigeria.
In the case of ad-valorem, the stamp duty is chargeable at the prescribed rates and shall be remitted to the Stamp Duties Account of either the Federal or the State Government.
Please note that the stamp duties chargeable on all electronic transfers of money (including those initiated by an individual and received by another individual) through any Money Deposit Bank in Nigeria, shall be remitted into the FIRS Stamp Duties Account ONLY. This account is a Federation Account; the revenue accruing therein is distributed monthly to the three tiers of government in Nigeria (i.e. Federal, State and Local Governments) at the Federation Accounts Allocation Committee (FAAC) meeting.
8.Burden of Payment
I.The burden of payment of stamp duties whether fixed or ad-valorem is that of the beneficiaries of a contract, or Money Deposits Banks customers who transfer an amount of N10,000 and above from his account to another customer’s account. In any case, the party making payment shall have the obligation to account for the applicable stamp duties.
II.The MDBs, MDAs, Landlords, and other executors of chargeable transactions are only agent of collection whose duties are to ensure that the stamp duties due on each transaction is remitted to the Federal or State Governments stamp duties Account as and when due.
III.It is the responsibility of MDAs, MDBs, Companies, Landlords, Executors etc. to ensure that service providers, contractors, tenants etc. pay stamp duties due on agreements, receipts and other dutiable instruments.
9.FIRS Adhesive Stamp vs Postage Stamp
It is necessary to state that postage stamp is administered by NIPOST for the purposes of delivery of items and documents. It does not denote duty and, therefore, not a substitute for the FIRS adhesive stamp which is produced for the sole purpose of stamp duty payment. Section 5(2) of the Stamp Duties Act provides that stamp duty may be denoted by an adhesive stamp. To this end, Service produced and launched FIRS adhesive stamps to denote stamp duty.
10.Penalties and Interest
Failure to deduct or remit stamp duties into the Federal or State Stamp Duties Account attracts relevant penalties and interest as stipulated in the Stamp Duties Act, Cap S8, LFN 2004 (as amended).
The FIRS is prepared to reposition Stamp Duties and make it the next major revenue source for Nigeria. As revenue from oil and gas continues to dwindle due to global fall in demand and price, indirect taxes such as Stamp Duty remain the viable and sustainable alternative revenue source for funding budgetary requirements by the Nigerian Government.
We hope that the above clarification and information on general or specific clarifications contained in the Stamp Duties Act and Public Notices by the Service would provide adequate information and guidance for the administration of stamp duties in Nigeria.