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Stamp duty: NIPOST to become FAAC member

By on February 18, 2016

Following the implementation of the Stamp Duty Act by banks operating in the country, the Nigerian Postal Service is to be classified as a revenue-generating agency, investigation has shown.

By this classification, NIPOST will join the elite club of government agencies that are members of the Federation Accounts Allocation Committee. About N2.5tn is expected to be generated from stamp duties on financial services industry transactions per annum.

The membership will enable NIPOST to attend the monthly FAAC meetings as well as post-mortem meetings where revenues accruing to the nation are analysed and shared among the three tiers of government.

Agencies that are members of FAAC, which state governments attend, include the Nigerian National Petroleum Corporation, Federal Inland Revenue Service, Nigeria Customs Service and the Revenue Mobilisation Allocation and Fiscal Commission.

As a revenue-generating member of FAAC, NIPOST will also have the privilege of retaining a portion of the revenue accruing through stamp duties as the cost of collection, while the rest will go into the Federation Account.

Monies accruing through the stamp duties are now being collected into the Stamp Duties Account opened at the Central Bank of Nigeria, which is part of the Treasury Single Account.

Investigation by our correspondent also showed that the contentious issue of the role of the FIRS had been resolved in favour of NIPOST as it had been established that the fund was a duty rather than tax that the FIRS superintends over.

To determine what percentage of the stamp duties to be retained by NIPOST as the cost of collection, a technical committee has been established and chaired by the Revenue Mobilisation, Allocation and Fiscal Commission. Membership of the committee is drawn from the CBN, NIPOST, RMAFC and Office of the Accountant-General of the Federation.

As a precedent, the NCS takes seven per cent of all revenues collected by the agency as the cost of collection, while the FIRS retains four per cent of its total collection. The technical committee will determine what percentage of stamp duties that NIPOST will retain.

The acting Chairman, RMAFC, Mr. Umar Gana, confirmed the establishment of the committee in an interview with our correspondent in Abuja on Tuesday.

He said, “In pursuance of the objective of mobilising and enhancing revenue into the Federation Account, the commission, after preliminary enquiry, observed some leakages of the revenue accruable from the application of the Stamp Duties Act.

“The commission is working assiduously to ensure full compliance with the Stamp Duties Act in all transactions in the economy.”

Our correspondent learnt that the technical committee had the responsibility to look at the grey areas emanating from the implementation of the Act. It will also monitor how much will accrue from the duties within the two months that it has to do its work.
[Punch]