The Federal Government has directed commercial banks in the country to henceforth deduct and remit 0.375% on all loans disbursed by them.
The deduction is to be made on the principal loan amount, according to a message sent to customers by banks.
This comes as the government expands the net on transactions covered by the stamp duty charges from regular bank transfers to foreign transactions and now loans.
Recall that banks were also in January this year directed to deduct stamp duty on old foreign transactions between January 2021 to December 2023 by January 31, 2024. Before that, the electronic money transfer levy was only applicable to accounts receiving electronic deposits of N10,000 and above or its equivalent.
Banks set to begin deductions
In a message sent to their customers on Wednesday notifying them of the deduction, one of the banks wrote:
- “Dear Valued Customer,
- “We write to inform you that the Federal Government of Nigeria has directed that all banks remit stamp duty on all loans.
- “In line with this directive, 0.375% on every principal loan amount disbursed will be debited and remitted to the Federal Government of Nigeria.
- “However, all existing approved loans remain unchanged and are to be fully repaid in line with the terms and conditions. We are committed to offering you exceptional service every step of the way.”
What you should know
According to the Federal Inland Revenue Service (FIRS), Stamp Duty is an indirect tax in Nigeria governed by the Stamp Duties Act (SDA), CAP S8 LFN 2004 (as amended).
- It is a tax charged for a stamp or seal applied on a written or electronic document which if executed, makes it a legal document and will be admissible in any court of law.
- Last year, a former Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, disclosed that the total revenue collected as stamp duty on behalf of the Federal Government in 6 years, between 2016 and 2022, stood at N370.686 billion.
- The disclosure came amid allegations by a member of the House of Representatives, Muhammed Kazaure, who claimed that a humongous sum of N89 trillion collected as stamp duty had been allegedly stolen.
Meanwhile, the current Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, while briefing the Senate earlier this month expressed optimism that with measures already put in place, the Federal Government is expecting an increase in non-oil revenues from revenue-generating agencies to exceed the N13 trillion recorded in 2023, by the end of 2024.