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Court Dashes FG’s Hope on N2.5tn Stamp Duty Revenue

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  • Court Dashes FG’s Hope on N2.5tn Stamp Duty Revenue

The Court of Appeal sitting in Lagos has dashed the hope of the Federal Government to raise about N2.5tn per annum from stamp duties on bank lodgements with value of N1,000 and above.

Ruling on an appeal filed by Standard Chartered Bank against Kasmal International Services Limited and 22 others, Justice Ibrahim Saulawa and four others justices of the Court of Appeal, Lagos Judicial Division, held that the Stamp Duties Act, 2004 did not impose a duty on Deposit Money Banks to deduct N50 on deposits.

The Central Bank of Nigeria had in a circular issued to the DMBs directed them to deduct N50 for stamp duties on every deposit into a current account of N1,000 and above from January 1, 2016.

The circular, which has since been implemented by the banks, was in spite of the fact that there was a subsisting issue in the court on the subject.

Kasmal International Services Limited, owned by Senator Buruji Kashamu, had on February 17, 2014 obtained the judgement of a Lagos High Court to the effect that that the banks should remit more than N6bn they were supposed to have collected on deposits since the stamp duties became an Act of Parliament in 2004 through the company to the Nigeria Postal Services.

According to Kasmal, NIPOST had appointed it as an agent to collect the stamp duties on its behalf from banks and other financial services firms, adding that the banks should, therefore, remit the money accruing as stamp duty through it to the postal organisation.

However, in the lead judgment, Justice Saulawa held that the Stamp Duties Act imposed no such duty on the banks. In concurring rulings delivered by an Appeal Court panel, Justices Ejembi Eko, Adamu Jauro, Moore Adumein and Nonyerem Okoronkwo agreed in totality with the ruling delivered by Justice Saulawa.

The appellate court set aside the ruling of the lower court delivered by Justice C. J. Aneke on five grounds. The court held that in the first place, NIPOST had no power under the Stamp Duties Act to impose stamp duty on any person and could not have passed the power it never had to any other party.

On one of the grounds, Saulawa said, “It is trite principle that the best way of proving payment of money into a bank account is by the production of a bank teller or an acknowledgment showing on the face thereof that the bank has (indeed) received the payment.

“Thus, contrary to the contention of the appellant, a stamped deposit slip or bank teller evidencing payment of monies into an account of a bank customer does amount to the issuance of a receipt to the said customer.

“However, I would want to agree with the submission of the appellant that in the absence of any express provision to the contrary, (by way of amendment of the Stamp Duties Act) the provisions of the schedule of the Stamp Duties Act, especially item four clearly show that the documents, which evidence receipt of monetary deposits by a bank, such as the appellant, are exempted from the payment of stamp duties.

“As such, there is no obligation thereupon to deduct and remit stamp duties on deposits or transfers, either as erroneously found by the court below, or at all. And I so hold.”

He also posited, “By the provision of section III of the Stamp Duties Act, all duties, fines, penalties and debts due to the government of the federation imposed by the Act shall be recoverable in a summary manner (exclusively) in the name of the Attorney-General of the Federation (or the state as the case may be).

“As such, there is no any specific provision in the said Act conferring power upon the 22nd respondent (NIPOST) to collect the sum of N50 for every N1,000 and above deposited in banks by way of teller deposits or electronic transfers.

“The alleged right or power of the 22nd respondent (NIPOST) to manage and collect stamp duties, being derived from non-existent provision of NIPOST and the Stamp Duties Acts, it goes without saying, that the 22nd respondent lacks the fundamental statutory right or power to manage and collect stamp duties. Consequently, the 22nd respondent cannot possess the locus standi to institute the instant action to enforce non-existent rights thereof.

“The purported amendments to the NIPOST and Stamp Duties Acts to the extent of conferring the 22nd respondent with the power to collect the sum of N50 for every sum of N1,000 and above deposited in banks (by way of teller deposits or electronic funds transfers) are non-existent.”

The appeal court also posited that Kasmal International Services Limited lacked the right to sue for enforcement of the provisions of the NIPOST and Stamp Duties Acts and that such a right could only be vested in NIPOST.

The judgment, which has been kept under wrap by all the parties in the case since it was delivered on April 21 as the banks have continued to charge N50 on deposits into current accounts, was obtained by our correspondents in Abuja on Tuesday.

Investigation showed that members of Technical Committee on Stamp Duty set up by the Federal Government were not aware of the judgement until sometime in July when they gathered for a meeting. It was at the meeting that the CBN informed them that there was a judgement against the collection of the duty.

Apart from the legal tussle, the directive by the CBN to banks to deduct N50 from bank deposits has been very controversial.

Is the CEO/Founder of Investors King Limited. A proven foreign exchange research analyst and a published author on Yahoo Finance, Businessinsider, Nasdaq, Entrepreneur.com, Investorplace, and many more. He has over two decades of experience in global financial markets.

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Government

Senate Suspends Senator Abdul Ningi for 3 Months Over Budget Padding Allegations

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Abdul-Ahmed-Ningi

The Senate has announced the suspension of Senator Abdul Ningi for three months following his allegations of budget padding to the tune of N3.7 trillion in the 2024 budget.

Ningi, who represents Bauchi Central and chairs the Senate Committee on Population, had made the claims in a recent interview with the Hausa service of the BBC.

During a plenary session, Senator Olamilekan Adeola, the Chairman of the Senate Committee on Appropriations, raised a motion to address Ningi’s allegations, citing the urgent need to address what he termed as “false allegations.”

The transcript of Ningi’s interview was read on the Senate floor, prompting deliberation on the appropriate action to take.

Initially, Senator Jimoh Ibrahim proposed a 12-month suspension for Ningi, but Senator Chris Ekpeyong moved to reduce it to six months.

Eventually, Senator Garba Maidoki amended the motion further, suggesting a three-month suspension.

The amended motion was put to a voice vote, and Senate President Godswill Akpabio announced the decision to suspend Ningi for three months.

Following the ruling, Ningi was escorted out of the Senate chamber by the Sergeants-at-arms.

The suspension comes amidst division within the Senate over Ningi’s claims, with some senators disowning his allegations and calling for a thorough investigation.

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Government

Ekiti Governor Unveils Multi-Billion Naira Relief Programmes Amid Economic Crisis

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Biodun Oyebanji

Ekiti State Governor, Mr. Biodun Abayomi Oyebanji, has announced a comprehensive relief package aimed at alleviating the hardship faced by the people of the state.

The relief programs encompass various sectors to cushion the impact of the economic downturn.

One of the key initiatives entails clearing salary arrears amounting to over N2.7 billion owed to both State and Local Government workers.

This move signifies the government’s commitment to addressing the financial burdens faced by its workforce.

Furthermore, Governor Oyebanji has approved a substantial increase of N600 million per month in the subvention of autonomous institutions, including the Judiciary and tertiary institutions.

This augmentation is intended to enable these institutions to implement wage awards in alignment with State and Local Government workers’ salaries.

In addition to addressing salary arrears, the relief programs extend to pensioners, with the approval of payments totaling N1.5 billion for two months’ pension arrears.

Moreover, an increase in the monthly gratuity payment to state pensioners and local government pensioners will provide additional financial support, totaling N200 million monthly.

The relief initiatives also encompass agricultural and small-scale business sectors.

The allocation of funds for food production and livestock transformation projects underscores the government’s commitment to enhancing food security and economic sustainability at the grassroots level.

Governor Oyebanji emphasized that these relief programs are part of the state’s concerted efforts to mitigate the adverse effects of the economic downturn and foster shared prosperity.

The comprehensive nature of the initiatives reflects a proactive approach towards addressing the challenges faced by Ekiti State residents.

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President Tinubu Orders Immediate Settlement of N342m Electricity Bill for Presidential Villa

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President Bola Tinubu has directed the prompt settlement of a N342 million outstanding electricity bill owed by the Presidential Villa to the Abuja Electricity Distribution Company (AEDC).

This move comes in response to the reconciliation of accounts between the State House Management and the AEDC.

The AEDC had earlier threatened to disconnect electricity services to the Presidential Villa and 86 Federal Government Ministries, Departments, and Agencies (MDAs) over a total outstanding debt of N47.20 billion as of December 2023.

Contrary to the initial claim by the AEDC that the State House owed N923 million in electricity bills, the Presidency clarified that the actual outstanding amount is N342.35 million.

This discrepancy underscores the importance of accurate accounting and reconciliation between entities.

In a statement signed by President Tinubu’s Special Adviser on Information and Strategy, Bayo Onanuga, the Presidency affirmed the commitment to settle the debt promptly.

Chief of Staff Femi Gbajabiamila assured that the debt would be paid to the AEDC before the end of the week.

The directive from the Presidency extends beyond the State House, as Gbajabiamila urged other MDAs to reconcile their accounts with the AEDC and settle their outstanding electricity bills.

The AEDC, on its part, issued a 10-day notice to the affected government agencies to settle their debts or face disconnection.

This development highlights the importance of financial accountability and responsible management of public utilities.

It also underscores the necessity for government entities to fulfill their financial obligations to service providers promptly, ensuring uninterrupted services and avoiding potential disruptions.

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