Banks add to worry of Nigerians with stamp duty deductions

BANKS may have added to the worry of Nigerians who are already struggling to make out a living during the period of COVID-19 crisis as payment of stamp duty takes effect. 

The Finance Act, 2019 resolved the controversy over the legality of the N50 stamp duty on electronic receipts and transfer of funds by setting the threshold for the charge at N10,000 for all types of accounts.

But Nigerians have expressed frustration on various platforms over this deduction and its impact on their finances.

Adeoye Martins a  sales boy in Abuja who spoke to The ICIR said: ” UBA has deducted about N1,500 from my account in the name of stamp duty and the money in my account is not mine, I have to look for the money back.”

Silas Mathias said, “These banks are just ripping us off, I would take my money away from the bank and keep at home before I wake up one day and they have deducted all I have.”

A Twitter user @Prisielebz and an Access Bank customer tweeted, “I don’t understand the debits made by Access Bank on customers’ accounts in the name of stamp duty. What exactly is going on?”

Another twitter user @banadvinice117 posted: “@UBAGroup @UBAFoundation You guys deducted about 900(50naira x18) between March and April. You’re charging 1,100 for March and Feb AGAIN .. what the hell is stamp duty. I need explanation abeg!!!!!!!!! #DAYLIGHTROBBERY #COVID19.”

According to Price Waterhouse and Coopers (PWC), under the Stamp Duty Act, stamp duty is payable on any agreement executed in Nigeria or relating, whatsoever, to any property situated in or to any matter or thing done in Nigeria.

Instruments that are required to be stamped under the Stamp Duties Act must be stamped within 40 days of first execution.

All deposit banks and financial institutions are required to charge stamp duties of NGN 50 on every eligible transaction above NGN 10,000.

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There are exemptions for transactions between accounts held by the same bank customer and for salary accounts.

Guaranty Trust Bank sent out emails to customers saying “Please be informed that in line with Central Bank of Nigeria (CBN) new directives, stamp duty now applies to all accounts.”

N50 will be charged on our savings account on all deposits and electronic transfers from N10,000 and above, while N50 will be charged on current account on all deposits and electronic transfers from N1000 and above

However, please note that deposits made to self and transfers within the same bank are exempted from the charge.

United Bank of Africa (UBA) also sent emails to customers saying “On February 1st 2020, the Federal Government of Nigeria (FGN) released a policy directing all banks to apply a stamp duty charge of ₦50 to all inflows of ₦10,000 and above.”

“You may have noticed this charge on a few of your transactions from April 1st 2020. The charges for February and March 2020 will be deducted from your account on May 9th,” the email revealed.

Peter Egun the ATM officer for Zenith Bank who spoke to The ICIR said: “If any customer receives cash deposit and not via online transfer the bank would take out stamp duty from N10,000 above.”

Charles Adepoju a cash officer with Access Bank said it is a directive from CBN, “and the banks have to take the charges for stamp duty, who would bear the cost if not deducted.”

Seyi Kolawole a Research Analyst at NASD PLC said stamp duty is important, but he thinks CBN should not have started now.

“They should have waited till when the current hardship has reduced in the country,” he said.

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