Stamp Duty In Nigeria: All You Need to Know

Oasdm stamp duty act
Oasdm stamp duty act

Hmm, stamp duties, what are they? Actually, the stamp duty is governed by the provisions of the stamp duties act of 1939 as ammended to date.

Stamp duty is a tax on an instrument. It is one of the types of taxes and is managed by the commissioner of stamp duties who may be appointed from within the service.

Instruments here include bills of exchange, share capitals of companies, debenture stock, property valuation, promissory notes and policy of life assurance, payment receipt, bank notes, etc.

stamp duty - stamp duties act

Federal Government shall be the only competent authority to impose, charge and collect duties upon the instruments specified.

These instruments if they related to matter executed between a company and an individual, group or body of individuals.

The state governments shall be responsible for the collection of duties in respect of instrument executed between persons or individuals at such rates to be imposed or charged as may be agreed with the Federal Government.

If you’ve read our detailed post on taxation in Nigeria, you’ll have seen that stamp duties are also one the indirect taxes.

Who pays the stamp duty? corporate organizations, banks, government agencies, insurance companies, etc.

Forms of Stamp Duty

There are 2 forms of stamp duties:

  • Fixed duties and;
  • Ad-valorem duties

Without further ado, let’s begin by explaining each.

Fixed Duties

Fixed stamp duty is a duty that do not vary with the consideration for the document being stamped.

The same duties is payable irrespective of the value of the instrument. Such instrument like payment receipt, cheque leaf, bank notes and guarantor forms are examples of fixed stamp duties.

Also Read: 8 different forms of cheques in Nigeria

Advalorem Duties

Advalorem stamp duty is a duty that vary with the amount of consideration and in accordance with a scale stated in the relevant schedule fixed by the government.

In ad-valorem assessment, the commissioner for stamp duty or adjudicator will be required to know the amount involved in the transaction for him to determine the correct duty to b e paid.

The instruments here include bills of exchange, share capitals of companies, debenture stock, property valuation, promissory notes and policy of life assurance.

Also read: All there is to know about Value Added Tax in Nigeria

stamp duty in nigeria - stamp duty act

You can learn more about the establishment of stamp duty and introduction of other taxes in this post on tax laws in Nigeria tax system.

Responsibilities of The Commissioner of Stamp Duties

The commissioner of stamp duty carries out the following functions:

  • He is the administrative head
  • He is responsible for assessing the instruments and imposing penalties where applicable.
  • He is responsible for stamping or embossing the instrument with the appropriate stamp denomination.
  • He is also responsible for keeping custody of the stamping instruments such as a die or the adhesive stamp.
  • He is responsible for adjudication.

Related: Withholding tax in Nigeria explained with video

Stamping of Documents

Stamp duties on a document should be paid as it is being prepared before its execution. Where instrument stamped after execution, a penalty may be imposed.

In practice, 40 days of grace is usually allowed for the stamp duty to be paid after execution, in which case the penalty may be waived.

Note that:

Any incomplete document does not need a stamp and can therefore be presented unstamped as an evidence.

If the rate of stamp duty changes before the document is complete, the applicable rate shall be the new rate at the time of stamping.

A document is treated as complete when it has been executed by the last party to execute and whose execution is necessary to make the document effective.

It is the date that the last party executes the document that would be inserted in it.

Method of Stamping

Stamp duty stamping of document can be done in any of the following ways:

  • Embossing with dies
  • Printing on the instruments
  • Affixing postage stamp in lie of adhesive stamps
  • Affixing adhesive stamp

Related: What is education tax?

stamp duty act- adjudication

Meaning of Adjudication

Adjudication is the process of determining the correct amount of duty, usually convincingly, by the Commissioner of Stamp Duties.

Any person may require the Commissioner to express their opinion on the liability to actual amount due.

As soon as the Commissioner has expressed an opinion, the instrument may be stamped with the amount duly determined.

Where the instrument is not chargeable, a stamp to show that no duty is chargeable must be impressed on it.

An adjudication stamp may also be impressed on the instrument. An adjudication stamp helps to denote that the instrument is duly stamped.

Importance of Adjudication

  • It is the first step in disputing the stamp duties office’s view of the correct amount of duty
  • It is the best that can be done to convince third parties that an intrument is genuine
  • It satisfies statutory requirement
  • Whee the instrument is duly stamped under the adjudication process, the instrument is admissible for all purposes not withstanding any objection as to the duty required to be paid.

Stamp Duty (Summary Notes)

The stamp duty is governed by Stamp Duties Act, CAP, S8, LFN 2004 (as amended) and it is administered on written documents only.

Also, it is administered by both Federal Inland Revenue Service, FCT and respective States Internal Revenue.

A lost instrument is presumed to have been duly stamped but where there is proof that it has not been stamped, it remains unstamped.

An instrument which is not lost can be presented for stamping on the payment on the necessary penalties, if the presentation is outside the statutory time limit. A lost instrument cannot be so presented.

There you have it on stamp duty. What you think? Let’s have your comment in the box provided below.



  1. Please answer these two narrow questions: (1). Must a seller pay Stamp Duty before Buyer has paid its obligation to the Seller?
    As I read the newest revision of Section 89 it appears to me that Stamp Duty must be paid only after Buyer has paid Seller. Am I correct. (2) Can the Commisioner for Stamp Duties or the FIRS use the “Best of Judgment” discretion to change the amount of Stamp Duty on a bank’s transfer to Seller of a partial (installment) payment?

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