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CBN Extends Stamp Duty Deduction To Savings Accounts

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The Central Bank of Nigeria (CBN) has extended the deduction of stamp duty on deposits into savings account, investigation has shown.

The Central Bank of Nigeria had through a circular issued on 15th January, 2016 directed the Deposit Money Banks to deduct N50 stamp duty on each deposit made into current accounts with a value of N 1000 and above in order to boost government’ s revenue drive and in compliance with Stamp Duties Act, 2004.

The apex bank anchored its directive on a court ruling obtained by Kasmal International Services Limited in 2014 to the effect that the 22 banks operating in the country should remit more than N6 tn to the Nigerian Postal Services through the company as the stamp duty they were supposed to have collected since the Stamp Duties Act was passed into law.

However , the CBN exempted savings accounts from the deduction of stamp duty .

The circular stated, “ With immediate effect , all DMBs and other financial institutions shall commence the charging of N50 per eligible transaction in accordance with the provisions of the Stamp Duties Act and the Federal Government’ s Financial Regulations 2009 ; that is, all receipts given by any bank or other financial institution in acknowledgement of services rendered in respect of electronic transfers and teller deposits from N1,000 and above.

“For the avoidance of doubt, the following receipts are , however , exempted from the imposition of stamp duties : payment deposits or transfers by self to self , whether inter or intra bank; and any form of withdrawals / transfers from savings accounts. ”

Investigation by PUNCH however, showed that the banks had extended the deduction of the stamp duty to savings account transactions.

It was gathered that the Nigerian Postal Services , the implementation agency of the Stamp Duties Act, was against the exemption of any bank account except savings accounts held by children.

It is not however clear when the collection of the duty was extended to savings accounts, but some bankers who spoke on condition of anonymity said the only exemption were deposits made by the owners of savings accounts.

This means that when a third party makes a deposit into a savings account with a value of at least N1, 000 , the sum of N50 is automatically deducted as stamp duty, which the bank has a responsibility to transfer to the NIPOST Stamp Duty Account domiciled with the CBN.

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