The Attorneys-General of the 36 states of the federation have dragged the Attorney-General of the Federation, Abubakar Malami, before the Supreme Court over the failure of the Federal Government to remit the funds generated from stamp duties into state accounts.
Tax experts who spoke to one of our correspondents on Thursday also explained that the states’ demand was justifiable.
In the suit marked SC/CV/690/2021, the 36 attorneys-general are praying the court to determine whether or not the states have the sole authority to administer and collect stamp duties on all transactions involving individuals/persons within their respective states.
They also asked the court to determine ‘whether having regard to the provisions of Section 4(2) of the Stamp Duties Act Cap. S8 of the Laws of the Federation of Nigeria read in conjunction with the provisions of Section 163, items 58 and 59 of the Second Schedule part I and items 7 (a) and (b) of the second Schedule part II and other provisions of the Constitution of the Federal Republic of Nigeria, 1999 (as amended), the defendant (AGF) could claim, retain, distribute or in any other manner deal with the monies or sums collected as stamp duties on individual persons transactions within the respective states of the plaintiffs without reference to, concurrence of, input or agreement of the plaintiffs?’
They are praying the court to determine that they are ‘entitled to 85 per cent of all stamp duties collected on electronic money transfer levy, on electronic receipts or electronic transfer for money deposited in deposit money banks and financial institutions, on any type of account to be accounted for and expressed to be received by the person to whom the transfer or deposit is made in the plaintiffs’ respective states’.
Consequently, the 36 state attorneys-general are praying the court for a declaration that they ‘are the sole authorities entitled to administer and collect stamp duties on all transactions involving individuals within their respective states.
“A declaration that the defendant is not entitled to collect, administer, or keep the proceeds of any stamp duties on transactions involving individuals within the respective states of the plaintiffs or any manner interfere with the plaintiff’s right and authority in administering the provision of Section 4(2) of the Stamp Duties Act Cap. S8 Laws of the Federation of Nigeria.
“A declaration that the plaintiffs are entitled to all the sums of money collected by the defendant as stamp duties through whatever source or means in their respective states from 2015-2020 and thereafter till the time of the judgment of this honourable court with respect to individual persons’ transactions.
“A declaration that the plaintiffs are entitled to 85 per cent of all stamp duties collected on electronic money transfer levy, on electronic receipts or electronic transfer for money deposited in deposit money banks and financial institutions, on any type of account to be accounted for and expressed to be received by the person to whom the transfer or deposit is made in the plaintiffs’ respective states.”
The state attorneys are also asking the court to compel the AGF to give account and pay back the monies generated from stamp duties from the states within 2015 – 2020 and thereafter till the time of judgment.
“An order of this honourable court directing the defendant to pay over to the plaintiffs all the sum of monies amounting to 176.07bn representing ascertained and admitted collected stamp duties on individual persons’ transactions within their respective states for the period of 2015-2020 and thereafter till the time of the judgment of this honourable court or any other sum as the plaintiffs may be found entitled by the honourable court.
“An order of perpetual injunction restraining the defendant by himself, privies, agents or any persons by whatever name or howsoever called from appointing anyone for the purpose of collecting stamp duties on individual persons’ transactions within the respective states of the plaintiffs henceforth.”
Experts who spoke to one of our correspondents said the demands of the states were constitutional.
The President, Chartered Institute of Taxation of Nigeria, Mr Adesina Adedayo, said, “As you are aware, taxation is law. Item 58 of Part 1, Schedule II to the Constitution, otherwise known as the Exclusive Legislative List, is the constitutional basis upon which the National Assembly enacted the Stamp Duties Act.
“A community reading of section 4(1) of the Stamp Duties Act and section 53(a) of the Finance Act, 2019 have empowered FIRS to collect stamp duties on behalf of the Federal Government.
“In relation to electronic receipts acknowledged by banks, FIRS is entitled to collect revenue accruing from transactions between a company and an individual or group of individuals.
“Although I am not a lawyer, I know that a combined reading of section 4(2) of the Stamp Duties Act, Section 53(b) of the Finance Act, 2019 and section 48 of the Finance Act, 2020, which created a new section 89A of the Stamp Duties Act, justifies the position that states are entitled to the revenue accruing from transactions between persons or individuals.
“In view of these clear provisions of the law, it could be said that the states have a good case but, as you know, only the learned lords of the Supreme Court have the final say on the matter. We watch events as they unfold.”
Also, a former President, CITN, Dame Olajumoke Simplice, said the states already have structures for collection of stamp duties in their states.
“Some states are highly commercialized; so the stamp duty that will come to them will be a lot, so why will the Federal Government collect it? If the states collect it, you can imagine all the stamp duties that would have accrued to each state, the state would have used it to pay salaries.”
She said that monies locked down on stamp duties in Central Bank was huge.