Modupe Gbadeyanka
By Modupe Gbadeyanka
The controversial deduction of N50 from deposits into accounts with Deposit Money Banks across the country using electronic platforms has been approved by the House of Representatives.
The green chamber of the National Assembly recently passed a new Stamp Duty Bill, which seeks to amend and repeal the 2004 Stamp Duty Act.
Although the 2004 Stamp Duty Act approved the fixing of N50 stamp on documents witnessing transactions worth N1,000 and above, the law became controversial when banks were directed to deduct N50 on deposits in banks of N1,000 and above.
But the new bill has raised the bar for the collection of stamp duty on bank deposits from N1,000 to N3,000.
However, the only accounts exempted in the new bill were children education accounts.
On the strength of the 2004 Act and a circular issued by the Central Bank of Nigeria (CBN) in January 2016, banks operating in the country have been deducting N50 from deposits in bank accounts across the country.
However, ruling on an appeal filed by Standard Chartered Bank against Kasmal International Services Limited and 22 others, Justice Ibrahim Saulawa and four other justices of the Court of Appeal, Lagos Judicial Division, held that the Stamp Duty Act, 2004 did not impose a duty on the DMBs to deduct N50 on bank deposits.
According to the court, electronic transactions are not covered by the Stamp Duty Act. The ruling has not stopped the banks from deducting the stamp duty on deposits of N1,000 and above.
It was based on the ruling of the court that the Nigerian Postal Service drafted the new bill to capture in black and white that bank deposits are to be subjected to stamp duty deduction.
The new bill seeks not only to remove some ambiguities contained in the original Act, but also to legitimise what has been collected as stamp duty by the DMBs since January 2016.
It also seeks to legitimise the recent inclusion of savings accounts as eligible for imposition of stamp duty as the CBN had in its memo on the matter excluded savings accounts for stamp duty collection.
