Banks illegal stamp duty collections and related dances

If you are a customer of any bank in Nigeria, you are a victim of the current illegal deduction of 50 Naira stamp duty being collected by all the banks in respect of electronic transfer and teller deposits. This macabre dance started in 2014, when a company called Kasmal International Limited purportedly owned by Senator Buruji Kashamu, ostensibly acting as agent for NIPOST filed an action against the banks urging the Federal High court to compel the banks to deduct the stamp duty and remit to NIPOST.

Kasmal obtained judgment and the Central Bank took the dance floor and gyrated in its usual manner with a directive issued on 15th January 2016 advising banks to commence the 50 Naira stamp duty deduction in obedience to the court order. The Central Bank in its directive stated that the court order formed part of its basis for the directive.

The banks led by Standard Chartered Bank changed the tempo of the dance by going to the Court of Appeal on this matter and the court of appeal in a very appealing tune set aside the judgement of the Federal High Court on 21st April 2016 – the justices ruled that the stamp duty charge is illegal and there is no statutory basis for this deduction from customers’ accounts. Since this ruling by the court of appeal, the Central Bank has become shy to come to the dance floor. The Central Bank is wall hugging despite many letters from Nigerian Employers Consultative Forum (NECA) and yet another court judgement obtained by Shoprite against Citibank wherein Shoprite challenged the deduction.

Our supposedly independent Central Bank is not captivated by the ruling of the court of appeal. Meanwhile, the banks in their quintessential buck passing have said they are waiting for a directive from the Central bank before they obey the order of the court of appeal. Why has the Central Bank not reversed its January 2016 directive since the court of appeal has set aside the judgment obtained by Kasmal which formed the basis for their directive? I have many guesses, but I hate guess work so I will leave it at that. My personal view is that the Central Bank should be at the forefront of institutions that obey court orders. I am also of the view that if a court gives a judgment, the banks do not need the Central Bank to affirm that judgement before it is obeyed by the bank. This sounds utopian?

While we are at it several other participants are also on the dance floor at different times and doing varying types of jigs, twirls, twists and even belly flops. The Attorney General of the Federation and Minister of Justice, Abubakar Malami (SAN), on March 23rd 2016 gave the Economic and Financial Crimes Commission (EFCC) a marching order to launch an investigation of the involvement of Kasmal International Services Limited on collection of stamp duties. See how the fox-trot goes: Kasmal wins the case, Central Bank rides on it to issue a directive, then the Attorney General steps in to investigate Kasmal whilst the banks are deducting the 50 naira from the customers. The volume of the music gets louder as the Revenue Mobilisation Allocation and Fiscal Commission steps in and secures the approval of the National Economic Council to probe banks (yes probe banks) over the collection of stamp duties. The Revenue Commission says they suspect that banks have pulled the wool over their eyes. The gist is that since the beginning of the collection of electronic stamp duties in January 2016, unconfirmed reports say that a total of N30bn had been realised through the collection of stamp duties by the banks as of December 31, 2018 but this is grossly lower than the expectation of both the government and the postal authorities because NIPOST consultant had estimated that NIPOST should earn about N475bn per annum from the duty. Is this why the banks are not obeying the court order? Is this why they are waiting for a directive from Central Bank that they probably know may never come? This unholy dance between the Central Bank and the bankers seems to be at play again? Whilst that is going on, at another end of the dance floor the Postmaster General of the Federation, Bisi Adegbuyi, is displaying some afro beat steps – he writes to the Governor of the Central Bank of Nigeria, Godwin Emefiele regarding the bank remittances into the CBN. Post Masters get things posted but they do not like to be posted. Mr Post Master wants a forensic investigation of the funds that have so far accrued to the Federal Government through the electronic collection of stamp duties by banks. Soon Inspector Jacques Clouseau ([ʒakklu.zo]) the fictional character the Pink Panther series will be invited to do the forensics.