N50 Stamp Duty on Bank Transactions Illegal – Court Declares

N50 Stamp Duty on Bank Transactions Illegal – Court Declares.

The N50 stamp duty which is imposed on depositors by the Central Bank of Nigeria has been declared illegal by a federal High Court sitting in Asaba Delta State, while giving the order said, it is illegal for banks to charge depositors.

Justice Nnamdi Dimgba made the declaration while delivering ruling in a suit filed by a businessman, Rupert Irikefe, last year, against the Central Bank of Nigeria (CBN), Attorney-General of the Federation and Zenith Bank, challenging the decision to impose N50 stamp duty charge on depositors.

Following CBN’s directive, Nigerian banks have been charging N50 on transactions above N1,000, a development that was seen as exploitation by depositors. Justice Dimgba ordered the CBN and all banks to immediately stop further collections of stamp duty fees from Nigerians because the Stamp Duties Act does not have provision for such taxes

The judge held:

“there was no express provision in the Stamp Duties Act or any law authorizing the deduction or imposing any obligation to deduct and remit N50 as stamp duty on teller deposits or electronic transfers of monies from N1,000 (one thousand naira upwards and accordingly nullified same.

“The conduct of the 1st and 2nd defendants in continuing to impose, direct the imposition, receive and or charge, deduct or remit the said sum of N50 as stamp duty on teller deposits or electronic transfers of money transactions from N1,000 upwards from the account of the plaintiff domiciled with the 2nd defendant is wrong in law, dismissive and contemptuous of the lawful orders of superior courts of competent jurisdiction, condemn-able, null and void and of no effect,” he  said.

The court however, awarded Irikefe N50,000,000 in damages for the inconveniences and pains caused by the unlawful and arbitrary imposition of the N50 stamp duty on his account.

Justice Dimgba reprimanded Zenith Bank for its actions given that Appeal Court had in 2014, ruled in favor of depositors in a similar case. Justice Dimgba said the Appeal Court should have served as a basis for the bank to reject the directive of CBN on N50 stamp duty charges.