Tuesday, February 27Inside Business Africa

After Covid-19 donations, banks commence stamp duty collections

Days after announcing its donation of over five billion Naira, the equivalent of $14 million, through its foundation to catalyse a comprehensive pan-African response to the fight against the coronavirus (COVID-19) global pandemic, the United Bank for Africa Plc (UBA) has disclosed that a stamp duty charge will apply on all customers’ Savings account.

According to the Bank, from 1st April 2020, stamp duty charges will apply on all Savings accounts in line with the Central Bank of Nigeria’s (CBN) requirements.

The bank said that when customers who have with savings accounts receive cash inflows of N10,000 and above, their accounts would be charged N50, noting that the deducted funds would be remitted to CBN daily.

Recently, some customers of First Bank of Nigeria Plc had decried the N50 stamp duty charges being deducted from their Savings accounts by the bank whenever they receive credits.

The customers argued that the new decision was taken by the CBN in its recent financial reforms instilled in the 2019 Finance Act, to deduct stamp duty charges from the customer’s accounts were unnecessary and would negatively impact the government’s financial inclusion drive.

A customer of the Bank, an entrepreneur, Victor Ifeanyi, who spoke with The Guardian, said First Bank didn’t even notify the customers about the recent charges before they commenced the deductions from their savings accounts.

According to him, he visited a branch of the bank located at Ago Palace Way roundabout to complain of the N50 debits on his account whenever he receives credit above N10,000 and was told by the customer care representative that it was a transaction charge.

His words: “After going to the Bank’s branch to complain, I was told to go home that it was transaction charges on my account. I argued that I have only received the money in my account which was about N25,000. The lady asked me to go that it was a directive from CBN.

“I went to another branch and I was told the debits were stamp duty charges for the monies I received. Seriously, how can the apex bank encourage the underserved to own bank accounts or be financially included and support its cashless policy and yet rip us off N50 on all credits above N10,000?

“This is simply daylight robbery and would simply scare people away from operating Savings accounts and make people embrace carrying cash rather than using the available digital platforms. It would hinder CBN’s financial inclusion agenda.”

Meanwhile, some experts in Nigeria’s financial sector have also condemned the stamp duty charge, saying it would hamper the CBN drive to get underserved Nigerians financially included.

Specifically, Head of Tax and Corporate Advisory Services, PricewaterhouseCoopers (PwC) Nigeria, Taiwo Oyedele, said the provision of the Finance Act 2019, which requires the payment of N50 one-off duty on electronic receipt and transfers of amounts above N10,000 was unnecessary.

Speaking with The Guardian, he said though the provision aims to correct the issue of the stamp duty charges transferred to customers by merchants, it has placed the burden on poor Nigerians who are not merchants but are charged N50 when they receive amounts above N10,000.

He said that issues such as this have made most adult Nigerians believe that the evasion of taxes is fine and that even if it is not fine, that it is understandable.

Citing a recent survey conducted by PwC, he said because of this and similar issues, 83 per cent of Nigerians believe that tax evasion is okay.

Source: Guardian

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