The Stamp Duties Act was recently amended to introduce a N50 stamp duty or Electronic Money Transfer Levy (EMTL) on electronic receipts or transfers of N10,000 and above in any bank. Further to this amendment, the Federal Inland Revenue Service (FIRS) and the Central Bank of Nigeria (CBN) directed Guaranty Trust Bank Plc (GTBank) to collect and remit the N50 duties to the FIRS.
The Anambra State Internal Revenue Service (AIRS) subsequently wrote to GTBank demanding that duties on transactions concluded by individuals resident in Anambra State, be remitted to AIRS. This led to the sealing and locking up of some of the bank’s branches in the state. GTBank then approached the Federal High Court (FHC) to seek the interpretation of the relevant tax laws.
Takeaway
The FHC ruled that electronic receipts and transfer of money transactions between customers is a banking transaction, and the Bank is a party. Therefore, the FIRS is the lawful authority to collect the said duty.
This judgement is expected to bring some respite to banks and other financial institutions who may be swamped with conflicting demands from the FIRS and State tax authorities where they have branches, to remit the N50 duty collections.
Please read our Tax Alert below: