NIPOST and FIRS have been at loggerhead over the collection of Stamp duty

By EMEKA EJERE

As the war between the Federal Inland Revenue Service (FIRS) and the Nigeria Postal Service (NIPOST), over the production and sale of stamp duty in the country rages with no end in sight, the Senior Staff Association of Statutory Corporations and Government Owned Companies (SSASCGOC), has called on the federal government to broker peace between the two agencies.

The union, which insisted it has the responsibilities to protect the interest of all senior staff in statutory corporations in the country, including the FIRS, called for a stakeholders’ meeting between government, SSASCGOC, the Ministry of Finance, the Ministry of Communication and Digital Economy, and the two agencies concerned.

A statement signed by Ayo  Olorunfemi, general secretary, and made available to newsmen in Abuja, maintained that SSASCGOC would not hesitate to declare full industrial action should the federal government fail to convene the stakeholders’ meeting at the expiration of a 21-day ultimatum issued to it last month.

The position of SSASCGOC is seen as a Corroboration of fears of those who think that unless serious efforts are made by the federal government to address the remote cause of the crisis with a view to resolving it, the cat and dog relationship existing between the two agencies may not end anytime soon.

President Muhammadu Buhari had on January 13, 2020, signed the Finance Bill 2019 into law making it the Finance Act 2020 which introduced new tax regimes and revenue collection strategies. The Act brought about some amendments in the revenue generation scheme of the federal government, one of which is the granting of exclusive right to the FIRS to collect stamp duty nationwide.

Stamp duty is a tax paid to the federal or state government on documents (also known as instruments). It is chargeable on transactions that include:  Power of Attorney (PoA), Deed of Assignment, Certificates of Occupancy (CofO), Sales Agreement, Lease Agreements, Memorandum of Understanding (MoU), Insurance Policies, Joint Venture Agreements (JVA), Contract Agreements, among others.

The payment of stamp duty is enabled by the Stamp Duties Act 1939 (SDA), as amended by numerous acts and various resolutions and contained in the Laws of the Federation of Nigeria. The SDA also provides a list of documents in its schedule and the duty payable on each of them.

A renewed onslaught

In 2016, the over N2tn stamp duty revenue collection tussle started among three agencies – the Central Bank of Nigeria (CBN), NIPOST and FIRS, when the stamp duty was reintroduced to the banking industry by the CBN.

The CBN had through a circular directed the banks to deduct N50 for stamp duty on lodgment transactions worth at least N1, 000. However, this did not go down well with NIPOST which sought to know where this directive left it (NIPOST) as the traditional custodian of the proceeds from stamps and thus, the stamp duty.

While the FIRS contended that it had sole responsibility for the collection of all taxes and duties in the country, NIPOST is the repository of stamps, the historical products from which emanated stamp duties introduced into the country for the first time on April 1, 1939 by the British Colonial Government through the Ordinance 15, 1939.

But FIRS insisted that it should superintend over the stamp duty fee collection as it had always done over other duties and taxes imposed by the federal government.  While CBN later left the stage, NIPOST and FIRS continued to lay claims to stamp duty collection since 2019.

On May 30 this year, NIPOST tackled FIRS, insisting it had the exclusive right to stamp duty collection and not FIRS. Justifying the move in a statement, NIPOST said the Finance Act 2020 contains some “contradictions”, which should be addressed by appropriate authorities. The postal agency said the Office of the Accountant-General had also issued a circular to NIPOST on the collection of both physical and electronic stamp duty of N50, maintaining that there was no conflict between NIPOST and FIRS.

The minister of Communications and Digital Economy, Dr. Isa Ali Ibrahim Pantami, had echoed that saying it was unfair to deny NIPOST the right to collect stamp duty. “To me, stamp duty should be collected by NIPOST, the same way the Nigerian Customs Service (NCS) collects customs duties. FIRS has been working on being the agency that collects stamp duty. It started before my appointment and I only got to know when the situation had deteriorated. I intervened by informing Mr President that NIPOST should be the one to collect stamp duty.”

Dr Pantami said he had also written to the minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, opposing the move.

However, on June 30, 2020, the position of the law was reaffirmed when at the inauguration of the Inter-Ministerial Committee on Audit and Recovery of Back Years Stamp Duties in Abuja, the Attorney General, Mr. Abubakar Malami, restated that it was the exclusive responsibility of FIRS to collect stamp duties, citing the Finance Act.

Malami said government would recover unremitted stamp duties of about N5 trillion from January 2016 to date from the relevant Ministries Departments and Agencies (MDAs), Money Deposit Banks (MDBs) and Nigerian Inter-Bank Settlement System PLC (NIBSS), amongst others.

Also at the event, the executive chairman of FIRS, Muhammad Nami, also announced measures to raise stamp duty collection to N1trn annually going forward. “There is assurance that the collection from stamp duty will be second to oil revenue as it has the potential to yield up to a trillion naira revenue annually if properly harnessed.”

Recent statistics from FIRS indicate that the agency has already ramped up stamp duty collection from N18 billion in 2019 to N80bn in 2020 and counting. This may sound good to the rest of the nation but not to NIPOST which saw it as a moment to return to the battle field.

On Tuesday, August 4, the board chairman of NIPOST, Maimuna Abubakar,  took to Twitter to call out FIRS. She said the revenue agency had ‘hijacked’ NIPOST’s duty by “selling stamps” rather than buy from it. Abubakar said any other agency “printing and selling stamps is against the law of the land.

“FIRS did not only steal our stamps but also our ideas; what NIPOST had worked for since 2016, our documents, patent and sneaked everything into finance bill and tactically removed the name of NIPOST,” she said in a viral tweet that had the hashtag #justicefornipost.

“There is nowhere in FIRS Act or Stamp Duty Act where it’s so stated that FIRS can produce stamp or sell stamp #justicefornipost.”

However, in a counter press statement, director of Communication and Liaison Department at FIRS, Malam Abdullahi Ismaila Ahmad, stated that the function was clearly contrary to the claim by NIPOST over the administration of stamp duties in Nigeria. On claims by NIPOST that FIRS stole its ideas, the FIRS director said, “This, to say the least, is a preposterous claim and great disservice to the government and people of Nigeria.

“The FIRS is determined to not only ensure that all monies collected by NIPOST into its illegally operated stamp duties account are fully remitted into the Federation Account but also make sure that any kobo not accounted for in that account is legally recovered in line with the charge of President Muhammadu Buhari to the recently inaugurated Inter-ministerial committee on the recovery of stamp duties from 2016 till date.