The Federal High Court sitting in Abuja has refused to restrain the Central Bank of Nigeria (CBN) from disbursing all accrued deposits paid into the CBN NIPOST stamp duty collection account by all Deposit Money Banks (DMBs) or commercial banks.
Justice Inyang Ekwo declined the request made by Kasmal International Services whose legal team claimed that it has a percentage in the N3.8 trillion naira domiciled in the Stamp Duty Collection Account.
The CBN and the Attorney-General of the federation were joined as respondents by the applicant in a motion ex-parte in the suit marked FHC/ABJ/CS/335/2024.
Stamp Duty claims
The applicant’s lawyer, Dr Alex Izinyon SAN submitted that his client was appointed by the Nigerian Postal Service to represent NIPOST in the collection of 50 naira on all receipts given by any bank or financial institution in acknowledgement of services rendered in respect of electronic transfers and teller deposits from N1,000 and above in compliance with the Stamp Duties Act and the Nigeria Financial Regulations 2009.
He added that the terms of the agreement between NIPOST and the plaintiff included the remuneration of N7.50 from every 50-naira deduction.
In his motion seen by Nairametrics, the lawyer stated that his client’s percentage has not been fully paid as agreed.
He argued that if disbursement is done to the exclusion of the plaintiff’s percentage, the plaintiff will be highly prejudiced and will suffer irreparable losses.
The motion reads,”
- “The Plaintiff has become aware by public disclosures of the Governor of the 1st Defendant that after the initial payment of N10.367 billion to the Plaintiff which did not reflect the total value of all accrued deposits which ought to have been paid into the 1st Defendant NIPOST Stamp Duty Collection Account No. 3000047517 within the period of 1st January 2015 till 31st January 2020, further remittances were made from the DMBs’ NIPOST STAMP DUTIES ACCOUNTS to the 1st Defendant NIPOST Stamp Duty Collection Account No. 3000047517 7 in the tune of over N370.7 billion which were amounts that accrued within the period of 1st January 2015 till 31st January 2020.
- “Currently, a total of 3.8 trillion naira stands in the Stamp Duty Collection Account ready for distribution between the Federal Government, State Government, Local Governments, the Federal Inland Revenue Service (FIRS), Coordinating Consultants and other bodies.
- “That the Plaintiff’s 15% which is NGN 579,130,698,440 is part of the 3.8 trillion naira in the Stamp Duty Collection Account.
- “The defendants/respondents have started taking steps to disburse and transfer the whole of the 3.8 trillion Naira in the Stamp Duty Collection Account without consideration of the outstanding payments due to the Plaintiff.”
The applicant prayed for the following orders against the CBN,
- “An order of interim injunction restraining the 1st and 2nd Defendants, either by themselves, agents, privies, assigns or whatsoever so called, from disbursing, distributing, transferring, depleting or doing anything whatsoever with all accrued deposits paid into or which ought to have been paid into the CBN NIPOST Stamp Duty Collection Account by all Deposit Money Banks (DMBs) pending the hearing and the determination of the Motion on Notice.
- “An order of interim injunction restraining the 1st and 2nd Defendants, either by themselves, agents, privies, assigns or any person or persons or body howsoever described or whatsoever so called, from attempting any transfer, payments, relocation, alienation, or tampering or doing anything whatsoever in respect of all accrued deposits paid into or which ought to have been paid into the CBN NIPOST Stamp Duty Collection Account by all Deposit Money Banks (DMBS) pending the hearing and the determination of the Motion on notice.”
In the alternative, the applicant also prayed for an “order of this Honourable Court directing the Defendants/Respondents to appear before this Honourable Court to show cause why the reliefs sought ought not to be granted.”
Rather than grant all the prayers, the judge asked the CBN to appear before him and explain why the request of the applicant should not be granted.
His order dated March 18, 2024 and seen Nairametrics on Friday, reads,
- “After hearing Dr. Alex A. Izinyon, SAN move in terms of the motion paper and the Court having considered the application. It is hereby ordered as follows:
- “Plaintiff is at this moment ordered to serve defendants with all processes in this suit within 2 days of this order.
- “Order is hereby made directing Defendants/Respondents to appear before this Honourable Court to show cause why the reliefs sought ought not to be granted on the next date of hearing.”
What transpired in court
At the resumed sitting on Friday, the court was informed that the CBN’s legal team was yet to show cause as directed.
Justice Ekwo then adjourned the matter to April 16 for hearing.
More insight
- Stamp duty is an indirect tax imposed on several financial transactions.
- In 2023, Nairametrics recalls that a former CBN governor, Godwin Emefiele revealed that the total revenue collected as stamp duty on behalf of the Federal Government in 6 years, between 2016 and 2022, was N370.686 billion.
- The applicant approached the court to determine its percentage from the agreed terms with relevant agencies.
- In 2021, the federal government declared NIPOST as the agency responsible for collecting stamp duties in Nigeria.