Economy

Intriguing Turnaround: NIPOST Reclaims Mandate on Stamp Duty

The issue of stamp duties has always been a serious bone of contention between two agencies of the Federal Government, the Nigerian Postal Service (NIPOST) and the Federal Inland Revenue Service (FIRS). Both agencies have been at daggers drawn over who should collect stamp duties. The case isn’t any different from twin brothers who tugged at each other over who should collect the rent for their father’s property. NIPOST and FIRS stood their ground in the conflict, insisting that the other was wrong in the matter of stamp duty issuance and collection of revenue on stamps.

The matter got to a head July last year following a tweet by FIRS that said “it is our authority to collect duty where agreement is between corporate entities, between entity and individual or body of individuals; while States are competent to collect where such agreement is between individuals.”

Chairman Board NIPOST, Maimuna Abubakar responded by insisting that “NIPOST are the sole custodians of national stamps. Another agency printing and selling stamps is against the law of the land. FIRS did not only steal our stamps but also our ideas; what NIPOST had worked for since 2016, our documents. They sneaked everything into finance bill and tactically removed the name of NIPOST.”

After three years of consistent dispute as to who deserves to collect stamp duty on behalf of the Federal Government, NIPOST has finally reclaimed its position from FIRS as the sole collector of stamp duty charges. The Minister of Communications and Digital Economy made this known while speaking at the launch of Nigeria’s 60th Independence Anniversary Commemorative Postage Stamps held at the Digital Economy Complex, Mbora Abuja few days ago:

“For the first time, the Finance Act 2020 recognised NIPOST as the custodian of stamp duties in Nigeria and that its stamps should be used for the authentication and validation of official documents.

“I’m glad that we are here today to unveil and launch the stamp. However, the stamp has been produced since but due to some constraints we couldn’t converge here for the celebration.

“It is always better late than never, because of this we are here to celebrate and not only to celebrate but to reflect and appreciate the beauty of our diversity as a country.

While acknowledging the president for his attentive role in the reversal, Isa Pantami paid homage to the National Assembly for bolstering the efforts to restore NIPOST’s birthright. Why the Federal Government decided to restore NIPOST to its original mandate, having stood as a strong proponent for FIRS, is quizzical.

It does appear that the feud between the warring factions had created bad blood between the two sisters of government. Apart from the fact that the feud had now degenerated into an ignominious public skirmish, it was affecting revenue accrual to the federation account. For instance, reports revealed that the Federal Government failed to account for monies realised from stamp duties in the whole of 2020. Federal authorities gave it away on grounds that the monies have not been booked into the fiscal account.

Recall that central issues in the FIRS and NIPOST feud included the account where the money realised from the implementation of the stamp duty will be lodged in; access to the account; and who gets what from the account that is estimated to attract more than N2.5tn per annum.

More so, part of the major drawbacks to NIPOST was largely finance-based. This is following the loss of Stamp Duty Collection to the Federal Inland Revenue Service (FIRS). Abdullahi Ismaila Ahmad, FIRS Director of Communication and Liaison, in a statement accrued to him had said that the FIRS was determined to ensure that all funds collected by NIPOST into its alleged illegally operated stamp duties account were full remitted into the federation account. NIPOST through its board chairman, Maimuna Abubakar, in response voiced out:

“I am worried for NIPOST, having sleepless nights because of NIPOST. We need the general public to come to our aid. FIRS stole our mandate.

“FIRS are now selling stamps instead of buying from us. What is happening; are we expected to keep quiet and let FIRS kill and bury NIPOST?”

Many people feel the current investigation of the immediate past Chairman of FIRS, Babatunde Fowler for corruption must have aided NIPOST’s case.

Revenue generation in Nigeria has always been an issue of critical concern for many revenue authorities, the public sector, and many stakeholders. The government has always deployed levies, taxes, and other charges like stamp duties to generate revenue.

NIPOST has been always been in charge of printing and handling stamps. Following the modernisation of the system, the term, stamp duty, was introduced, which is also a stamp charge. While a good fraction believe that NIPOST should be the one in charge and that FIRS should have no business with it, others agree with the obverse.

Historically, the Nigerian Postal Service has always been at the center of the sale of postage stamps and accounting for revenues accruing on stamp duty on such transactions to the Federal Government. This is based on the Stamp Duties Act which makes the Federal Government the only competent authority to impose, charge, and collect duties upon qualifying instruments executed between parties involving a company.

Read Also: Stamp Duty: A Looming Tenancy Crisis?

The attempt to enforce the Stamp Duties Act by the Federal Inland Revenue Service (FIRS) was what became a bone of contention between the agency and NIPOST. The Finance Act 2019 amendment to Section 4 of the SDA however statutorily named FIRS the only competent authority to impose, charge, and collect duties upon qualifying transactions involving one or more companies. The CBN had through a circular directed the banks to deduct N50 for stamp duty on lodgement transactions worth at least N1,000. However, NIPOST sought to know where this directive leaves it as the traditional custodian of the proceeds from stamps and thus, the stamp duty.

While the FIRS contends that it has sole responsibility for the collection of all taxes and duties in the country, NIPOST is the repository of stamps. It is in fact the historical products from which stamp duties were introduced into the country for the first time on April 1, 1939, by the British Colonial Government through the Ordinance 15, 1939.

FIRS has nonetheless been very functional in its role of generating revenue for government. The agency’s introduction of a Tax Registration Number registration system has helped it bridge Nigeria’s growing fiscal deficit. It has equally increased the amount of information tax authorities can have about taxpayers. Ceding the collection of stamp duties to the owners should not affect what they harvest annually, as their hands are always full with other taxes and levies in the country.

Nelson Okoh

Categories: Economy, Features, Politics

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