Finance bill: ‘Its unlawful to share stamp duty, bank levy nationally’

A member of the Chartered Institute of Taxation of Nigeria, (CITN), Mr Francis Ubani, has flayed the attempt in the Finance Bill 2022 to share revenues from stamp duty and electronic transactions in states by the federation.

The bill was stepped down by President Muhammadu Buhari this month for adjustments before he would assent to it.

A copy of the petition, acknowledged by the Federal Ministry of Justice, stated that the amendment to the sharing formula for revenue from stamp duty/Electronic Money Transfer Levy (EMTL) is unconstitutional.

He listed the new subsections as follows – “Notwithstanding any formula that may be prescribed by any other law, the revenue accruing by virtue of the operation of this section, shall on the basis of derivation, be distributed as follow: - (a) 15% to the Federal Government and the Federal Capital Territory, Abuja; (b) 50% to the State Governments; and (c) 35% to the Local Governments.

According to him, these are clearly inconsistent with, and in violation of the provisions of Section 163 of the Constitution of the Federal Republic of Nigeria, 1999, as amended, and therefore are null, void and of no effect whatsoever.

He insisted that Capital Gains Tax and Stamp Duties are supposed to be paid, when applicable to the states from which they are derived and not for the benefit of all the states if such are paid into the Federation Account.

Ubani also urged all federal government institutions, money deposit banks and individuals involved, to be more transparent on stamp duties/ EMTL collection, recovery and distribution, as enshrined in the constitution and the Stamp Duties Act, 2004.

“Deposit money banks and financial institutions should henceforth stop remitting qualified chargeable stamp duties/EMTL accruable to the different states of the federation, pursuant to Section 4 (2) of the Stamp Duties Act, 2004, as amended to FIRS,” he noted.