Banks are defying a court order to illegally collect stamp duties from customers

Stamp duties

April 21, 2016 the court of appeal Lagos division under the lordship of Justice Ibrahim Saulawa and four other Justices gave a judgement in an appeal filed by standard chartered bank against Kasmal International services limited and 22 others as relating to non-payment of bank stamp duties. In its ruling, the appeal court held that the stamp duty Act, 2004 did not impose a duty on the banks to deduct #50 on deposits. This judgement literally put an end to the collection of #50 stamp duties by banks, but the order is yet to be complied with by the Central Bank of Nigeria (CBN) whose duty is to regulate the operations of banks in the country.

The non-compliance after two years of the judgement has now received the attention of Nigeria Employers Consultative Association (NECA). NECA while reacting to the continuous collection of the stamp duty, called on the federal government to compel commercial banks to discontinue the collection which it termed illegal. Its Director General, Olusegun Osinowo said there are existing fifty five different taxes a company is expected to pay to all tiers of government, which is mostly duplication of several taxes. According to him the addition of the stamp duty is one too many.

It is important the federal government call on the CBN to obey the court order directing banks to stop this illegal collection of stamp duties. This is necessary as government in its continuous drive to achieve its ease of doing business agenda must know that multiple taxation greatly hinders the ability of businesses to thrive as it cripples their financial bottom lines. At the moment, what government should be aiming at is reduction of taxes by preventing multiple collection of such to encourage the growth of businesses especially the SMEs. The call by NECA is apt and timely.

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