Are There No Lawyers In The National Assembly To Advise Members On Stamp Duties? – Babs Animashaun


Perhaps, one of the major issues in taxation in Nigeria in year 2019 is the clamour that the Nigerian Postal Service should take over the collection of Stamp Duties. Proponents of this view have succeeded in convincing the National Assembly to amend the Nigeria Postal Service Act to empower the Nigeria Postal Service (NIPOST) to be the body that will be saddled with the responsibility to collect Stamp Duties.

What these agitators failed to realise is that the power to collect Stamp Duties alone without more powers cannot be  effective. What will be effective is, if the body is given the full powers to administer, collect, account for, etc Stamp Duties. In other words, NIPOST will need the kind of powers currently given to FIRS to collect Federal taxes. This anomaly, ought to have put a stop to the issue before it ever got to the National Assembly. Alas, the National Assembly has considered the view of these agitators and from all indications, a bill amending the NIPOST Act has been forwarded to the President for his Assent.

Whilst I agree that in a democratic setting, the Legislative arm of Government cannot be stopped from debating any issue with a view to passing any law for the good of the country[1], it is however the responsibility of everyone to make their opinions known to the National Assembly while the exercise is on. On the passing of the law, if there exist any ground for declaring any such law as unconstitutional and therefore, null and void, persons with the requisite locus standi can challenge the law.

One of the major issues which these agitators and the National Assembly need to consider is the effect of section 162 and 163 of the 1999 Constitution on the amendment being made to the NIPOST Act.

By section 162 (1) of the Constitution, the Federal Government is mandated to maintain a special account into which all revenues collected by the Federal Government shall be paid[2].  Section 162 (3)[3] states that, money in the Revenue Account standing to the credit of the Government of the Federation must be distributed among the Federal, State and the Local Government Council in each of the States.

Section 163 further provides that the taxes collected shall be distributed among the States of the Federation on the basis of derivation.

On the other hand, section 52 (1) and (2) of the Nigerianl Postal Service Act provides that a fund shall be established to defray all expenditures incurred for the purposes of the postal service. The fund shall consist of money allocated to the Postal Service as well as revenues generated from both postal and non-postal services rendered by the Nigerian Postal Service.

It is opined that it will be immaterial to categorise as either postal or non-postal services, the revenue generated from Stamp Duties by NIPOST (if NIPOST is allowed to be the agency to collect Stamp Duties) as the effect will be the same. That is, NIPOST can use the sum to defray expenditures incurred for the purposes of the postal service.

This will run contrary to both sections 162 and 163 of the 1999 Constitution. What proponents of the take-over of collection of Stamp Duties by NIPOST fail to realise is that, by section 1 (1)[4] and (3)[5] of the 1999 Constitution ]NIPOST will have no choice other than to treat the revenue generated through Stamp Duties the same way as FIRS is doing. This is because it is elementary that where there is a conflict between any of the provision of the Constitution and the provision of any other law,  the provision of the  Constitution  shall prevail. Although, it is opined that, there might be leakages here and there in the process of NIPOST collecting taxes on Stamp Duties; such leakages will only foster more corruption in our tax administration.

Now assuming NIPOST is given  the power to collect Stamp Duties, this will have a greater impact on the Federal Inland Revenue Service (Establishment) Act 2007 (FIRSE Act).  This impact will lead to so much uncertainty in the collection of Stamp Duties. And one of the core elements of a tax is that, it must be certain and easy to administer.

For instance, Section 2[6]gives the FIRS power to administer the different “taxes and laws specified in the first schedule or other laws made or to be made” and to account for all the taxes collected. Stamp Duties Act is listed as Item 6 of the first schedule to the FIRSE Act. This simply means the FIRS is the body saddled with the Responsibility to control, administer and account for revenue generated from Stamp Duties paid to the Federal Government[7].

Section 8 of the FIRSE Act gives powers[8] necessary for the administration of taxes to the FIRS. For instance, the power to “ collect, recover and pay to the designated account any tax under any provision of this Act (FIRSE Act) or any other enactment or law[9].

Are the proponents of granting powers to NIPOST to collect Stamp Duties also saying that NIPOST should also be giving all these powers[10]. That will clearly breed unnecessary confusion and will lead to a change in the purpose for which NIPOST was set up. The long title of NIPOST suggests that it was set up primarily to provide for Nigeria Postal Service and for matters connected therewith. Collection of Taxes is clearly not part of what NIPOST was set up to do.

The proponents of granting powers to NIPOST to collect Stamp Duties have equally failed to provide  answers to section 4(2) of Stamp Duties Act which gives power to State Governments to collect duties in respect of instruments executed between persons. Does that mean that NIPOST will take over the collection of revenue that the States are meant to collect?

Further section 6 of the Stamp Duties Act gives power to the relevant State Civil Service Commission to appoint Commissioner(s)[11] for Stamp Duties for the State. Will NIPOST also be the body  to appoint State Commissioners for Stamp Duties or will NIPOST just hold on to the portion that is being collected by FIRS? The proponents of NIPOST take-over of Stamp Duties are sure giving us more questions than answers. This will no doubt lead to  more confusion and uncertainty in collection of Stamp Duties.

It does appear that Mr President is aware of all the legal implications of the amendment to the NIPOST Act. It is on record that President Buhari once vetoed an earlier amendment to NIPOST Act. The amendment was to grant the NIPOST power to collect Stamp Duties. The Minister for Finance has also taken a stand similar to the one taken by Mr President. What is worrisome is that the lawyers in the National Assembly have disappointed some of us who had assumed that  the legal implications of the provisions would have been highlighted  by the lawyers in the National Assembly with a view to stopping the National Assembly from embarking on the ill advised  journey to grant powers to NIPOST to collect Stamp Duties.

Babs Animashaun is a Legal Practitioner based in Lagos, Nigeria.


[1] Section 4 of the 1999 Constitution

[2] The only exemption being the proceeds from the Personal Income Tax of the personnel of the armed forces of the Federation, the Nigeria Police Force, the Ministry or department for Foreign Affairs and the residents of the Federal Capital Territory, Abuja.

[3] 1999 Constitution

[4] Section 1(1) of the 1999 Constitution provides that : This Constitution is Supreme and its Provisions shall have binding force on all authorities and persons throughout the Federal Republic of Nigeria

[5] Section 1(3) of the Constitution provides that: If any other law is inconsistent with the provision of this Constitution, this Constitution shall prevail, and that other law shall to the extent of the inconsistency be void.

[6] FIRSE Act

[7] It is important to understand that there are instances where the State Inland Revenue Service has the duty to collect Stamp Duties. See section 4(2) of Stamp Duties Act.

[8] Section 8 (1)  (a ) to (t) and (2) of FIRSE Act

[9] Section 8(1) (c) of  FIRSE Act.

[10] Like those in Section 8 (1)  (a ) to (t) and (2) of FIRSE Act

[11] One or more persons can be appointed as State Commissioners for Stamp Duties. Secc section 6 of the Stamp Duties Act.

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