Stamp duty is a tax charged on written and electronic instruments, otherwise referred to as documents. It was first introduced to Nigeria via Ordinance 41 of 1939, but currently codified as the Stamp Duties Act, Cap S8, LFN 2004 (“SDA” or “the Act”). Besides the Act as the main legislation, there are also subsidiary legislations to the Act – the Stamp Duties (Mortgage and Marketable Security Duties) Regulations of 1963 and the Stamp Duties (Approval for One Unit Die of One Million Naira) Notice of 2003.
The Act has seen little to no amendment since its enactment in 1939, until the passing of the Finance Act 2019, through which the SDA was amended to include electronic instruments within the purview of stamp duties in Nigeria. Effective from February 2020, electronic documents are now considered dutiable instruments.
Prior to 2020, the only active areas of compliance with the Act were upon incorporation of companies and filing of notice of increase in share capital at the Corporate Affairs Commission (CAC). With the introduction of the Finance Act 2019 and the inauguration of the Inter-Ministerial Committee on the Audit and Recovery of Stamp Duties in 2020 by the President to recover unremitted stamp duties, more focus is now drawn to stamp duty by the government and taxpayers alike.
Stamping of dutiable instruments is imposed by the relevant provisions of the Act, and as such not a voluntary obligation of taxpayers. That is, even where there is no likelihood of a litigation, as erroneously believed in the past, the responsibility to pay stamp duty subsists and remains as such until discharged.