The effects of the Stamp Duty tax on depositors into receivers accounts is beginning to take its toll as stockbrokers are now advising investors that they will now start passing this charge to them. This follows the recent directive by the CBN to banks to start deducting stamp duty from deposits into the accounts of receivers.
The stamp duty is N50 for every deposit of N1,000 and above made into a depositors current account. Savings accounts, salary accounts and same holder accounts are excluded from this charge. Here is an email sent by a broker to an investor.
We wish to inform you that in line with Central Bank of Nigeria (CBN)’s directive for the enforcement of the Stamp Duties Act, LFN 2004 involving charging of NIPOST Stamp duty on all payments/transfers into current accounts, we have commenced the deduction of the said Stamp Duty from clients’ payments/lodgments with effect from January, 2016. As you may be aware, the CBN released a circular recently compelling all Deposit Money Banks and Other Financial Institutions to commence charging with immediate effect, the sum of N50 for any deposit above N1,000 for the benefit of NIPOST.
From January 2016 and going forward, all transfers/payments into our bank account in excess of N1,000.00 for the purchase of shares shall be less the N50 NIPOST Stamp duty. By implication, clients’ Stockbroking accounts will be debited accordingly.
Thank you for your cooperation in this regard.
In Nigeria, investors typically deposit funds into their brokerage accounts kept with stockbrokers which is then debited to fund purchase of shares. Similarly, when those shares are sold the brokerage accounts are also credited with the funds from the buyers broker. Sale and purchase of shares also often involves brokerage accounts being debited or credited in piece meals. For example, a sale of shares can often be made in parts and to different buyers meaning that payments will be deposited into your brokerage account more than once. This implies that transactions can be quite voluminous and thus the N50 charge can start to accumulate as a major cost.