36 state government sue FG over stamp duty collection as tax dispute worsens

The tax dispute between the different tiers of government appears to be worsening as the 36 state governments have sued the Federal Government over the latter’s alleged failure to remit funds generated from stamp duties into the state accounts.

In a new twist, the state governments, through their Attorney-Generals, are contending that they, and not the Federal Government should collect the stamp duties.

What the 36 state governments are asking for

• In a suit filed before the Supreme Court on Thursday, they asked the court to determine whether or not they are the sole authority to administer and collect stamp duties on all transactions involving individuals and persons within their respective states and not the Federal Government.
• The state governments also asked the court to ascertain whether or not they are entitled to 85% of all stamp duties collected on electronic money transfer levy, on electronic receipts or electronic transfers for money deposited in deposit money banks and financial institutions.
• The statement of claims from the states also partly reads, “A declaration that the defendant is not entitled to collect, administer, or keep the proceeds of any stamp duties on transactions involving individuals within the respective states of the plaintiffs or any manner interfere with the Plaintiff’s right and authority in the administering the provision of Section 4(2) of the Stamp Duties Act Cap. S8 Laws of the Federation of Nigeria.
• “A declaration that the plaintiffs are entitled to all the sums of money collected by the defendant as stamp duties through whatever source or means in their respective states from 2015-2020 and thereafter till the time of the judgment of this honourable court with respect to individual persons’ transactions.’’
• The Supreme Court is, however, yet to fix a date for the matter to be heard.

What you should know

This development is coming amid the conflict between some states and the Federal Inland Revenue Service (FIRS) over the collection of Value-Added Tax (VAT).

The state government have been exploring ways to increase their revenue generation and reduce the dependence on allocation from the federation account which has been inadequate.