Law and Awareness Series (Issue 2)
By: Emmanuel Omotayo Johnson
Introduction
I believe by now we all must have been used to term “stamp duties” – no thanks to the N50:00 (Fifty naira) stamp duties charge the banks charge on our accounts for any electronic money transfer exceeding N10,000:00 (Ten thousand naira). Well, it’s just a matter of time before we show these banks “crazy” for their semi-clandestine misappropriation of our money in the name of stamp duties charge. They would even go to the extent of charging stamp duties on the account of both the sender and the beneficiary of the electronic money transfer (which ought not to be so – only the beneficiary ought to be charged).
Well, that is just by the way. Our focus today is on the whole essence of stamp duties. What exactly is stamp duty? What type of document/instrument do I have to stamp and why should I even have my documents/instruments stamped? These are the questions this issue of Law and Awareness serves to answer.
Meaning of Stamp Duties
Section 23 of the Stamp Duties Act, 2004 defines stamp duties as duties basically on Instruments. Section 2 of the Act then defines instrument (for the purpose of stamp duty) as every written document. Hence, stamp duties are levies charged on every written document evidencing a transaction.
What are the Transactions Attracting Stamp Duties?
The instruments that are required by law to be stamped are as follows:
(a) Leases;
(b) Contract Notes;
(c) Bills of Lading;
(d) Agreements;
(e) Duplicates and Counterparts;
(f) Marketable Securities;
(g) Mortgages;
(h) Notarial Acts;
(i) Policies of Insurances;
(j) Receipts;
(k) Settlements;
(l) Share Warrants;
(m) Warrants for Goods;
(n) Appraisement;
(o) Instrument of Apprenticeship;
(p) Bank Notes, Bills of Exchange and Promissory Notes;
(q) Conveyances of Sale;
(r) Other Conveyances;
(s) Exchange Partition or Division;
(t) Letters of Powers of Attorney and Voting Papers; and
(u) Capital of Companies.
While instruments that are specifically exempted from stamp duties are as follows:
(1) Those relating to agreements between the Federal government and other foreign governments;
(2) Instruments relating to reconstruction and amalgamation; and
(3) Transactions and sales of properties of a company under liquidation arising from a compulsory winding up by a court or creditors’ voluntary winding up.
Now, to the major part of the part of this issue.
Why should I Stamp my Instruments/Documents?
The primary objective of stamping of documents is specifically mentioned in Section 22(4) of the Stamp Duties Act, 2004. It states that;
“An instrument executed in Nigeria or relating wheresoever’s executed, to any property situate or to any matter or thing done or to be done in Nigeria, shall not, except in criminal proceedings, be given in evidence, or be available for any purpose whatever, unless it is duly stamped in accordance with the law in force in Nigeria at the time when it was first executed”.
There you have it, the whole essence of having your documents stamped. If a document is not stamped, it does not invalidate the existence of the transaction but, such document cannot be tendered in any civil action to establish the existence of the transaction. Other implications of unstamped document are;
(1) Such an instrument is not admissible whether directly or for collateral purpose. The secondary evidence of the instrument is not admissible either.
(2) Cross examination upon an unstamped instrument is not allowed.
Be aware that, there are only two bodies that can validly stamp a document, they are;
(1) The Federal Inland Revenue Service (FIRS); who is responsible for the stamping of documents evidencing transaction between companies, and individuals and companies.
(2) The Internal Revenue Service of any of the 36 States of the Federation (e..g. the Lagos State Internal Revenue Service (LIRS)); who is responsible for the stamping of documents evidencing a transaction between individuals alone.
Conclusion
The stamping of documents is very essential for the purpose of establishing the existence of the object for which it was created. Where a document is not stamped, if any matter arises from it, such a document cannot be tenable in civil actions. This on its own represents a form of punishment to the person intending to use it in evidence – one which might run to huge loss depending on the circumstances of the case.
Get your documents stamped today, and avoid the trouble associated with unstamped documents!
DISCLAIMER!
This publication does not in itself constitute legal advice or recommendation on the subject, to any individual, group of persons and/or the general public. It is solely for public education. If legal advice or other expert assistance is required, the service of a competent professional person should be sought.
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