On the back of non-remittance infractions by banks, the lawmakers have initiated move to probe banks, and its regulatory arm, the Central Bank of Nigeria. As a result registered alleged failure in remittance of stamp duties collected, Stakeholders have asked the government to remove the burden the stamp duties places on banking transactions.
It would be recalled that in 2016 when the Central Bank of Nigeria (CBN) instructed all deposit banks (DMBs) and financial institutions operating in the country to begin placing a N50 charge on every bank deposit of 1000 and above, some financial experts had called it tax on the poor.
Years after, it has been alleged that banks have failed to properly account for amount collected from the customers and the members of the house of representative have declared intention to probe total stamp duties remittance.
According to the circular sent to all deposit banks (DMBs) and financial institutions, banks were expected to charge N50 for every transaction of N1,000 and above transferred into an account either electronically or through a bank teller. The apex bank had noted that charge was in accordance with the provision of the Stamp Duties Act and Federal Government Financial Regulations 2009.
Also, the CBN clarified that stamp duty excludes payment deposits or transfers made by self to self whether inter or intra bank and any form of withdrawal from savings accounts. Also, these charges are only payable by receiving accounts.
There were lot of mixed reactions on social media regarding the new stamp duty as many Nigerians view it as an additional cost to their banking transactions since banks already charge a particular amount for online transfers, amongst other charges.
Now, the House of Representatives is to constitute an ad hoc investigative panel over the non-remittance of stamp duty by the Central Bank of Nigeria (CBN), money deposit banks and other collection agents.
The lawmakers alleged the banks and other collection agencies are shortchanging the nation by refusing to remit the duties into the Federation Account of Nigeria. The ad hoc panel has four weeks to carry out the assignment and report back for further legislative action.
This followed the adoption of a motion of urgent public importance by Goni Lawan (APC, Yobe), who noted that independent efforts by both local and international civil society organisations (CSOs) to get details of the collections have so far failed.
According to him, the Nigeria Postal Service (NIPOST) in 2014 initiated the stamp duty collection scheme, following which a firm, the School Banking Honours (SBH) obtained authorization of the Central Bank of Nigeria (CBN) to engage the banks and other qualified collection agents.
He said: “But the complicit irregularity by which public institutions including the CBN, Nigeria Interbank Settlement System (NIBSS), NIPOST among others, have over time failed to remit stamp duty taxes into the Federation Account running into trillions.
“While the deductible amount per bank account may seem small, it cumulatively adds up to money in billions and trillions of Naira, and must be subjected to the full condition of disclosure and transparency.
“If such funds were made available, they could have been used to pay salaries, provide infrastructure and financing economic development in the country, or at least should have generated some interests in the private accounts where the fund is domiciled”.
In addition, the lawmakers regretted that due to concerns mounting over the non-remittance, it is clearly an obvious disobedience to the Treasury Single Account (TSA) policy for the stamp duties fund to be hidden in commercial banks instead of being remitted to the TSA.
Speaker Dogara, in his remarks noted that at N50 for bank transaction of over N1000, the duties must have built into a huge fund capable of solving the challenges of paucity of fund associated with many of the nation’s abandoned and uncompleted projects.
On the street, many people are querying why they should be subjected to further agony of paying additional duties when they are already paying their taxes. Some ask that government should remove stamp duty deduction from banking transaction totally.