Home Business News Stamp Duty Controversy: CBN recovers over N35bn as probe begins

Stamp Duty Controversy: CBN recovers over N35bn as probe begins

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The Central Bank of Nigeria (CBN) revealed it has recovered over N35 billion from commercial banks, being part of the reported N20 trillion stamp duty funds that were unremitted.

The CBN Acting Director of Banking Services, Mallam Abubakar Kure, disclosed this on Wednesday in Abuja while he appeared before the House of Representatives Adhoc committee probing the non-remittances of N20trn stamp duty incomes from 2010 to date.

According to the CBN Acting Director, the apex bank has recovered the sum of N35.2bn between February 2016 and now. However, the sum has not been remitted to the Federation Account on behalf of the Nigerian Postal Service (NIPOST).

While reacting to the reason for non-remittance of the recovered stamp duty funds, Kure explained that the CBN has not been authorised to move funds to customers accounts.

“we Submitted bank statements from 2016 to date stating all the collection of stamp duties dated May 13th. Also submitted were .details of bank-by-bank submissions.

“Bank duties collected have not been remitted to the federation account as we haven’t received instructions from the account owners. we’re not authorised to move funds to customers accounts if there’s no instruction to that effect.”

Pending Litigation – In the meantime, Kure explained that the CBN is aware of litigation pending at the supreme court. Specifically, he noted that the litigation in court prevents the movement of the recovered funds into the Federation Account, stressing that after pending court litigation, funds will be remitted on the instruction of Nigerian Postal Service (NIPOST).

Meanwhile, the honorable members further asked Kure to explain why the CBN continues to recover the Stamp duties when it is not remitting yet to the Federation Account. He then explained that the apex bank is guided by the court ruling which specified that funds recovered should be returned to those whose accounts were debited. He further stated that the CBN in collaboration with relevant agencies and the deposit money banks will effect the directives.

The Back Story – In 2017, the Nigeria Senate mandated its committee on finance and banking, insurance, and other financial institutions to investigate alleged N7 trillion non-remittance of stamp duty revenue in the last five years.

The committee was constituted following the report that the agencies refused to disclose details of the stamp duty revenue whose status has been shrouded in secrecy over the years.

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Remitted funds – Meanwhile, yesterday, asked Kure to explain why no record of stamp duty collection was recorded in January 2016. The CBN representative explained that there was a circular in 2016 asking banks to remit all charges collected from stamp duties and that commercial banks have complied as they wouldn’t have violated such a directive that would attract stiff penalties to them.

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Reacting on the CBN claim, Mr. Oladele Agboola, Company Secretary and legal adviser to the Nigerian InterBank Settlement Systems plc (NIBSS) disclosed;

“before 2016, no bank collected stamp duties from their customers because there was no legal basis to do so, neither was their instructions for any bank to charge stamp duty on any transfer made electronically.”

Similarly, the NIBSS Secretary stated that the organisation was engaged with the mandate of assisting with the weekly collation of stamp duty charges deducted from account holders in commercial banks from March 2017. However, contrary to the figured recovered by the CBN, NIBSS claimed to have recovered N35bn.

“From March, 2017 to May 2019, NIBSS has collected the sum of N35bn from commercial banks and remitted to CBN on a weekly basis.”

Upon noticing the disparity between figures provided by the CBN and NIBSS, Agboola stressed that the gap from February 2016 to March 2017 must have accounted for the differences in figures presented by the two sides.

Upshots – Controversies still surround the huge unremitted stamp duty fund which has been revealed to be around N20 trillion. Earlier, Nairametrics revealed that the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has perfected plans to embark on a nationwide probe of banks over the non-remittance of stamp duties which is now in the tune of N100 billion.

While the probe is expected to bite hard on defaulting banks, cutting sharp practices in the banking sector will aid in tightening leakages in order to recover Stamp Duty revenue which will reduce the budget deficit financing in Nigeria.

3 COMMENTS

  1. This issue of stamp duty is very frustrating to bank customers. Some banks don’t even pay interest on savings anymore, all they do is charge stamp duty on every transaction carried out with them. Like in my case, when interest is paid on my savings, my available balance gets reduced instead of increasing. Funny indeed. I deposit, stamp duty, I transfer stamp duty, somebody transfers money to my account I get stamp dutied, I use ATM I get charged, I buy airtime, I get charged. Well, there’s nothing I can do about it. I have to get used to it

    • If you’re using a current account, change to a savings account. If it’s a savings account you’re already using, I advise you change bank.

      Such actions are disincentivising!

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