The Joint Tax Board, JTB, has stated that the current Stamp Duty Act is obsolete and requires urgent review to reflect the current state of the nation’s tax system.
A consultant, Albert Folorunsho who spoke at the 148th JTB meeting held in Abuja on Thursday said that the Act which was introduced in 1939 contains certain outdated provisions that encourage multiple taxation.
The meeting was themed, “Achieving effective & efficient administration of stamp duties and other related taxes for enhanced revenue generation in Nigeria.”
He explained that presently, certain transactions businesses conduct, are subject to both Stamp Duty and Value Added Taxes.
He said, “Stamp duty is an old law that is backed by Stamp duty Act of 1939. So, there are a lot of things that are there that are no longer relevant to current realities so there is a definite need for immediate reform of that law.
“Specifically, who is to pay Stamp Duty? what is the timeline for the payment of Stamp Duty? what is the instrument that are really relevant for stamp duty right now?
“Do you still need to stamp all of those instruments that are listed in the provision which was put there when VAT wasn’t in existence?
“Now, we have VAT on some of those transactions and we are still charging Stamp Duty on the same transaction.
“So, I think if we can streamline the stamp duty provisions in that light, we will make it more effective.”
On Personal Income Tax, Folorunsho disclosed that PIT can significantly boost internally generated revenue of states if properly harnessed.
He pointed out that in countries like South Africa, PIT contributes about 34 per cent to total tax revenue generated in the country but only contributes 11 per cent of Nigeria’s tax revenue.
“On personal income tax, we looked at what is the most productive tax line now in several jurisdictions. It is the PIT, Nigeria is generating around 11 per cent of their total revenue from PIT while in other countries like South Africa, PIT contributes about 34 per cent of the revenue.
“So, the states need to go back and look at those who are not complying, particularly the high-net worth individuals, those in the informal sectors, the unorganized institutions are the ones that are not complying, but their focus has always been employers who remit PIT,” he added.
Also speaking, the Secretary, JTB, Obomeghie Nana-Aisha, said that the purpose of the meeting was to explore avenues where other forms of taxes such as Stamp Duty can be leveraged to boost revenue generation at the national and sub national level and drive economic development in the country.