Stamp Duties! Two words Nigerians hate to hear especially with the recent fiasco involving a major Nigerian Bank which almost drove most of its account holders crazy with the deduction of lump sum accrued stamp duties from February, 2020 which they had negligently failed to deduct at the proper time.
In a bid to increase the Internally Generated Revenue (IGR) from taxes, the Federal Government through the Federal Inland Revenue Service (FIRS) last week announced new areas on which Stamp Duties will now be charged.
The FIRS announced that this is to conform with the new Finance Act, 2020 which provides that Stamp Duties should be paid on two categories of chargeable transactions namely; Fixed Duty Instruments and Ad-Valorem Instruments.
Fixed Duty Instruments basically implies that a fixed amount is paid as tax on a certain taxable instruments/documents/transactions irrespective of the transaction sum or consideration paid. Some of the Instruments that fall under this category and are chargeable under this new Stamp Duties regime are:
- Power of Attorney (PoA)
- Certificate of Occupancy (C of O)
- Proxy form
- Appointment of Receiver
- Memorandum of Understanding (MoU)
- Joint Venture Agreements (JVA)
- Guarantor’s form
- Ordinary Agreement Receipts
Stamp duties chargeable on ad-valorem instruments are charged based on a percentage of the whole transaction sum or consideration. Documents/Instruments under this category are:
- Deed of Assignment
- Sales Agreement
- Legal Mortgage or Debentures
- Tenancy or Lease Agreement
- Insurance Policies
- Contract Agreements
- Vending Agreement
- Promissory Notes
- Charter-Party and Contract Notes
The FIRS in its announcement also stated that the new Adhesive Stamp Duty needs to either be affixed or imprinted on the above stated documents in order to give legal backing to them.