The stamp Duties Act has been in existence since colonial era. The present one was first promulgated in 1990 and reviewed in 2004. In the past, attempts to enforce it have all failed.
From 2004 upward, the Central Bank of Nigeria had issued three circulars on its enforcement without any positive result.
Today, Much have changed. Although the law has been in place, what was lacking was the enforcement culture. The government is now determined to enforce all financial laws and regulations in order to shore up revenue and prevent leakages.
What does it cover?
It covers any note, memo or writing whereby any amount of money (in excess of N4.00) is acknowledged or expressed to have been received, deposited or paid.
How does it affect you?
A financial transaction levy of N50.00 is deducted on any receipt via electronic payment, cash or cheque in excess of N1,000.00. Note that fifty naira is deducted not on every N1,000.00 but on every transaction in excess of N1,000.000 whether it is in millions or billions.
Are there exemptions?
Yes. It does not include self-to-self transfer whether intra or interbank, and it also exempts transfers and withdrawals involving savings account that are used by majority of low income earners in Nigeria.
Is this practiced only in Nigeria?
No. it is a global practice that has been in place in many countries
If fully enforced, the stamp duties act has the potential to generate over 2 trillion naira annually of which only about 50 – 100 billion will come from the fifty naira cash receipts. The rest will come from stamp duties on shares, bonds and property purchases. It is also capable of generating between 100,000 to 300,000 jobs in the postal service sub sector.
Legal implication here is that receipts not backed by duty stamps are not legally recognized and are therefore not acceptable as evidence before the courts.