CITN Member Petitions Attorney General of the Federation, Over Finance Bill 2022

Minister for Justice and Attorney General of the Federation, Abubakar Malamai (SAN)

By Emmanuel kehinde,Ilorin

A member of the Taxation Standards and Practice Monitoring Committee of the Chartered Institute of Taxation of Nigeria, (CITN), Mr. Francis U. Ubani, (FCTI), has petitioned the Minister for Justice and Attorney General of the Federation, Abubakar Malamai (SAN), over some provisions of the Finance Bill 2022.

A copy of the petition acknowledged by the Ministry of Justice was made available to journalists on Saturday.

He said the amendment to the sharing formula for revenue from stamp duties/electronic money transfer levy (EMTL) as proposed by the provisions of Section 23 of the Finance Bill 2022, which seeks to amend Section 89A of the Stamp Duties Act, make some substitutions for subsection (4) are unconstitutional.

He listed that new subsection as follows – “Notwithstanding any formula that may be prescribed by any other law, the revenue accruing by virtue of the operation of this section, shall on the basis of derivation, be distributed as follow: – (a) 15% to the Federal Government and the Federal Capital Territory, Abuja; (b) 50% to the State Governments; and (c) 35% to the Local Governments.

According to him, these are clearly inconsistent with, and in violation of the provisions of Section 163 of the Constitution of the Federal Republic of Nigeria, 1999, as amended, and therefore are null, void and of no effect whatsoever.

He maintained this is so since the distribution of the Stamp Duties/Electronic Money Transfer Levy (EMTL) revenue is based on derivation, pursuant to the provisions of Section 163 of the Nigerian Constitution, and should not be shared through “the Federation Account” pursuant to Section 162 of the said Constitution, without proper Constitutional amendment.

He said, “It is in fact, very clear that the provisions of Section 163 of the Constitution under reference, that Capital Gains Tax and Stamp Duties are supposed to be paid, when applicable to the States from which they are derived and not for the benefit, inter alia, of ALL the States, which will be the case, were the tax and duties are to be paid into the Federation Account, pursuant to Section 162 subsection (3) of the Constitution).”

Ubani also urged all Federal Government Institutions, Money Deposit Banks and Individuals involved, to be more transparent and come clean, and obey the Rule of Law on stamp duties/EMTL collection, recovery and distribution, as enshrined in the relevant provisions of the 1999 Nigerian Constitution as amended, and the Stamp Duties Act, 2004, as amended.

He said, “It is obvious that the activities of the Federal Government, through the FIRS, CBN, and Deposit Money Banks, in the collection, remittance and distribution of stamp duties/EMTL is shrouded with a lot to be desired, and calls to question as to the motive behind the unwholesome actions of the Federal Government, and its agencies (FIRS) and (CBN) in this regard.

“It is obvious that the activities of the Federal Government, through the FIRS, CBN, and Deposit Money Banks, in the collection, remittance and distribution of stamp duties/EMTL is shrouded with a lot to be desired, and calls to question as to the motive behind the unwholesome actions of the Federal Government, and its agencies (FIRS) and (CBN) in this regard.

“Deposit Money Banks and Financial Institutions should henceforth stop remitting qualified chargeable stamp duties/EMTL accruable to the different States of the Federation, pursuant to Section 4 (2) of the Stamp Duties Act, 2004, as amended to FIRS.

The different States of the Federation have a duty to explore and track the recovery of stamp duties/EMTL that accrue to both the Federal and State Governments, pursuant to Section 4 (1) and 4 (2) of the Stamp Duties Act, and Section 163 (a) and (b) of the 1999 Constitution, as altered and to recover back years of unremitted stamp duties from banks and other companies in the various sectors of the economy.

“The current proposed amendment of the Stamp Duties Act, through the Finance Bill, 2022 cannot stand, without the proper amendment of the relevant provisions of the Constitution of the Federal Republic of Nigeria, 1999, as altered.”

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