Lagos drags FG to Supreme Court over Stamp Duties Act

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The Lagos State Government has dragged the Nigerian Government to the Supreme Court seeking interpretation of the provisions of the Stamp Duties Act, Laws of the Federation, 2004.

The action was filed on behalf of the Lagos State Government by its Attorney General, Mr. Adeniji Kazeem, with the Attorney General of the Federation representing the Federal Government as the Defendant.

In the Originating Summons, Lagos State Government is asking the Apex Court to determine amongst other things whether the Federal Government has any power to collect and keep money paid as Stamp Duties on behalf of Federating units pursuant to sections 4(1) of the Stamp Duties Act, Cap S8 Laws of the Federation of Nigeria, 2004.

Lagos State Government also wants the Apex Court to determine whether, in view of the clear provisions of section 4(2) of the Stamp Duties Act, the Defendant through its banker, Central Bank of Nigeria, CBN, possesses the power and authority to collect and keep custody of the deducted sum remitted to it by commercial banks operating in the territory of Lagos State from January 15, 2016 till date with respect to the ₦50.00 deducted as Stamp Duty receipt on every deposit of ₦1,000.00 and above

The Summons is also asking the Honourable Court to determine whether in view of the provisions of section 4(2) of the Stamp Duties Act, Lagos Government is entitled to collect as duties on receipt with respect to deductions by Banks of the sum of ₦50.00 on every transaction of ₦1,000.00 and above as deposit between persons or individual transaction within the territory of Lagos.

On the determination of the issues raised in the Summons, the Plaintiff is praying the Court to declare that the Lagos State Government is entitled to duties in respect of deductions of ₦50.00 on every deposit of ₦1,000.00 and above by Commercial Banks between persons or individual transaction within the territory of the State.

The Plaintiff is also seeking a declaration that the Federal and State Government are empowered through the President and Governor, respectively under Sections 115 and 116 of the Stamp Duties Act to issue regulations to bring into effect the provisions of the Act especially as it relates to the Schedule of the Stamp Duties Act.

Besides asking the court to declare that the action of the Federal government in collecting Stamp Duties within its territory without remittance as illegal, the Plaintiff wants the Court to make an order compelling the Federal Government to remit all such monies it has already collected.

As part of the grounds for seeking the reliefs, the Lagos State Attorney General, Mr. Adeniji Kazeem, stated before the Court that amongst other things that the provisions of Sections 4(1) and (2) of the Stamp Duties Act empower the Federal and State Government to impose, charge and collect stamp duties in different circumstances.

The Lagos State Government’s position is, that while the Federal Government is the only competent authority to impose, charge and collect stamp duties between a company and an individual, group or body of individual, Lagos State Government by virtue of Section 163(b) of the constitution is entitled to the sum equal to the proportion of the net proceeds of the sum collected as duties on such transaction within the territory of Lagos State.

The State further argued that by the provision of section 4(2) of the Stamp Duties Act, it is the exclusive preserve of the Lagos State Government to collect duties on instrument executed between persons or individual transaction within the territory of Lagos State, including the deductions of ₦50.00 on every deposit of ₦1,000.00 and above which serves as a receipt.

The State Government argued that by literal interpretation of the combined provisions of sections of the Stamp Duties (Recovery and Collection) Regulation, 2016, the State Government is entitled to the deductions of ₦50.00 on every deposit of ₦1,000.00 and above as a form of receipt by the Commercial Banks which part of the sum is in the custody of CBN and Commercial and Banks. The Lagos State Regulations 2016 made pursuant to the Stamp Duties Act, also captures electronic transactions which hitherto was not part of the Schedule.

It would be recalled, in a related case last year, that Senator Buruji Kashamu, as the Chairman of Kasmal International Services filed action at the Federal High Court in Lagos, seeking as agent of NIPOST to compel all 22 Banks in Nigeria to remit Stamp Duties collection to NIPOST through his Company. This case was ruled in his favour, but later upturned by the Court of Appeal upon an appeal by the Nigerian Banks.

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