A member of the Taxation Standards and Practice Monitoring Committee of the Chartered Institute of Taxation of Nigeria, (CITN), Francis Ubani (FCTI), has petitioned Minister of Justice and Attorney-General of the Federation (AGF), 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 at the weekend.
He said the amendment to the sharing formula for revenue from stamp duties/electronic money transfer levy (EMTL) as proposed by provisions of Section 23 of the Finance Bill 2022, which seek to amend Section 89A of the Stamp Duties Act, make some substitutions for Subsection (4) 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 per cent to the Federal Government and the Federal Capital Territory, Abuja (b) 50 per cent to the state governments and (c) 35 per cent to the local governments.”
According to him, these (proposals) are clearly inconsistent with, and in violation of provisions of Section 163 of the 1999 Constitution (as amended), and therefore, are null, void and of no effect whatsoever.
He maintained this is so since the distribution of the stamp duties/EMTL revenue is based on derivation, pursuant to provisions of Section 163 of the Constitution and should not be shared through “the Federation Account” pursuant to Section 162 of the Constitution, without proper constitutional amendment.
His words: “It is in fact, very clear that 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 urged all Federal Government institutions, deposit money banks (DMBs) and individuals involved to be more transparent, 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 and Stamp Duties Act, 2004 (as amended).
He went on: “It is obvious that the activities of the Federal Government, through the FIRS (Federal Inland Revenue Service), CBN (Central Bank of Nigeria) and DMBs, 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.
“DMBs 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 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 Constitution 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.”