March 17, 2020
WHO IS AUTHORIZED UNDER THE LAW TO COLLECT STAMP DUTIES IN NIGERIA
BY FELIX TERUNGWA AYEM, LLB, BL, HRM; Associate at KMO LEGAL
The office of the Attorney General of the Federation is created by the provisions of section 150 (1) of the Constitution of the Federal Republic of Nigeria, 1999 (as amended). The section provides clearly as follows:
“There shall be an Attorney-General of the Federation who shall be the Chief Law Officer of the Federation and a Minister of the Government of the Federation”.
The position of the Attorney-General as described above entails that he is the numero uno, that is, the number one law officer in the whole of the Federation and that automatically places him in the position of the Chief Advisor to the President on all legal issues.
Recently, there has been a serious controversy surrounding the collection and/or administration of stamp duties in Nigeria. A battle line has been drawn between the Nigerian Postal Service (NIPOST) and the Federal Inland Revenue Service (FIRS) with each claiming the right to the collection of stamp duties in Nigeria.
It is rather unfortunate that such an unfortunate battle has been allowed to occur in the first instance as the law is clear on the appropriate body to administer the stamp duties in this country.
To further buttress the above, it is instructive to set out the functions of those bodies with a view to identifying the right authority legally clothed with the function of administering the stamp duties. It is also pertinent to point out at the onset that the FIRS was established with a core mandate to generate and/or collect revenue on behalf of the Federal Government whereas the NIPOST was specifically established for the purpose of carrying out postal services in Nigeria without the need to specifically generate revenue for the government while carrying out such services.
For the avoidance of doubt, section 4 of NIPOST Act which provides for the functions of NIPOST states as follows:
- To develop, promote and provide adequate and efficiently coordinated and economic postal services at fair and reasonable rates and fees;
- Maintain an efficient system of collection, sorting and delivery of mails nationwide;
- Provide various types of mail services to meet the need of different categories of mail users;
- Establish and maintain postal facilities of such character and in such location consistent with reasonable economics as will enable the generality of the public to have ready access to postal services.
With all due respect, the above provisions do not by any stretch of imagination confer any power on NIPOST to administer any form of taxes in Nigeria or even generate revenue from its operations.
On the other hand, the Federal Inland Revenue Service (Establishment etc) Act has specifically mandated the Federal Inland Revenue Service (FIRS) to administer all forms of taxes under the various tax Acts in Nigeria. A review of some of those sections would be of immense assistance to the instant discourse.
Section 2 of the FIRS Act provides as follows:
The object of the Service shall be to control and administer the different taxes and laws specified in the First Schedule or other laws made or to be made from time to time by the National Assembly or other regulations made thereunder by the Government of the Federation and to account for all taxes collected.
There is no doubt that the FIRS power to administer taxes in Nigeria took its roots from the above provision. There are many Tax Acts and laws in Nigeria including the Stamp Duties Act as listed in the First Schedule to the Act. To further empower the FIRS, section 25(1) of the FIRS Act further states in clear terms to the effect that the Service shall have power to administer all the enactments listed in the First Schedule to the FIRS Act and any other enactment or law on taxation in respect of which the National Assembly may confer power on the Service.
It is instructive to reproduce the provisions of the First Schedule to the FIRS Act so as to clearly set out the number of tax laws that are directly under the administration and control of the FIRS. The Schedule states as follows:
LEGISLATIONS ADMINISTERED BY THE SERVICE
- Companies Income Tax Act Cap. 60 LFN, 1990.
- Petroleum Profits Tax Act Cap. 354 LFN, 1990.
- Personal Income Tax Act No. 104, 1993.
- Capital Gains Tax Act Cap. 42 LFN, 1990.
- Value Added Tax Act 1993 No. 102, 1993.
- Stamp Duty Act Cap. 411 LFN, 1990.
- Taxes and Levies (Approved List for Collection) Act 1998 No.2, 1998,
- All regulations, proclamation, government notices or rules issued in terms of these legislation.
- Any other law for the assessment, collection and accounting of revenue accruable to the Government of the Federation as may be made by the National Assembly from time to time or regulation incidental to those laws, conferring any power, duty and obligation on the Service.
- Enactment or Laws imposing Taxes and Levies within the Federal Capital Territory.
- Enactment or Laws imposing collection of taxes, fees and levies collected by other government agencies and companies including signature bonus, pipeline fees, penalty for gas flared, depot levies and licenses, fees for Oil Exploration License (OEL), Oil Mining License (OML), Oil Production License (OPL), royalties, rents (productive and non-productive), fees for licenses to operate drilling rigs. Fees for oil pipeline licenses, haulage fees and all such fees prevalent in the oil industry but not limited to the above listed.
From the foregoing, one wonders where the controversy as to which body should administer stamp duty is emanating from considering that taxes and collection thereto is purely statutory.
It is my considered view that NIPOST has no power to collect stamp duties and their claims have no legal basis whatsoever. There is no such provision in the Nipost Act that confers any power on Nipost to administer the stamp duty either alone or alongside the FIRS. Assuming without conceding that there is such provision in the Nipost Act, such provision would have been rendered null and void by the provisions of section 68 (2) of the FIRS Act which states thus:
“If the provisions of any other law, including the enactments in the First Schedule are inconsistent with the provisions of this Act, the provisions of this Act shall prevail and the provisions of that other law shall to the extent of the inconsistency be void”.
Furthermore, the revenue generated and or administered by the FIRS under the relevant Acts and laws is to be distributed among the Federal, States and Local Governments pursuant to section 163 and Second Schedule to the Constitution of the Federal Republic of Nigeria, 1999 (as amended). On the other hand, section 53 of the NIPOST Act provides as to how the funds realised by NIPOST should be applied in the following manner:
The Board may apply the fund established under section 52 of the Act-
- To the cost of administration of the postal services;
- To remunerate, fees and allowances of the members of the postal services;
- To the payment of the salaries, fees and other remunerations, allowances, pensions and gratuities payable to members of the postal service.
It therefore means that the core mandates of the two agencies are completely different and there is no need for the controversy that is currently ongoing.
In view of all I have said above, the Honourable Attorney-General, who is the number one law officer and the chief custodian of our laws and the rule of law, should promptly do the needful by advising the President on the appropriate authority vested with the legal duty to administer the stamp duty in Nigeria. Any attempt to take away the power of administering the stamp duties from FIRS and give to NIPOST would lead to anarchy and breach of the clear provisions of the Constitution and other enabling laws.