Court Says Stamp Duties for Bank Deposits Illegal

By Sahabi Abdul

A Nigerian court struck down the Central Bank of Nigeria directive authorizing stamp duties charged on bank deposits, describing it as illegal.

Justice Nnamdi Dimgba of the federal high Court in Asaba declared in his ruling last week that “there was no express provision in the Stamp Duties Act or any law authorizing the deduction or imposing any obligation to deduct and remit N50 as stamp duty on teller deposits or electronic transfers of monies.” He, therefore, declared the action of the CBN and banks as null and void.

CBN Governor Emefiele

The presiding judge also awarded 50 million naira as damages to Rupert Irikefe, a businessman  who had filed the lawsuit to challenge the CBN and Zenith Bank for making the deductions.

The ruling is a blow to efforts by President Muhammadu Buhari’s administration to increase revenue from taxes following the drop in income from oil exports as prices tumbled from 2015, when the regime first came to power.

While stamp duties were first introduced in Nigeria under British colonial rule, the CBN under Godwin Emefiele as the governor, gave the law a very liberal interpretation two years ago to extend its application to money transfers and deposits.

Justice Dimgba berated the CBN and Zenith Bank at the December 9 ruling, which just became public, for misapplying the stamp duties law, pointing out that a 2014 judgment by the Court of Appeal had gone in favour of depositors,  and should’ve been sufficient reason for the authorities not to take their illegal act.