Banks to deduct N50 stamp duty on savings account transactions

By Odunewu Segun

Owners of saving accounts in the country are now to pay a N50 stamp duty on each deposit made into their saving accounts with a value of N1, 000 and above in order to boost government’s revenue drive, National Daily investigation has shown.

According to a new directive in a circular by the Central Bank of Nigeria, 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.

The circulated stated: “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.”

Recall that the CBN had through a circular issued on January 15, 2016 directed the Deposit Money Banks to deduct N50 stamp duty on each deposit made into current accounts with a value of N1,000 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 N6tn 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.

National Daily however gathered that showed that the banks had extended the deduction of the stamp duty to savings account transactions.

It was also 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 was not clear as of press time when the collection of the duty was extended to savings accounts, but some bankers who spoke on the 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.