Emokiniovo Dafe-Akpedeye, who holds a First Class Degree in Economics and Management and a Law Degree from the University of Oxford, and Joseph Onele, also a First Class holder in Law from the University of Ibadan, argue that electronic cash transfers ought not be liable to stamp duty.
‘It is not wisdom but authority that makes a law.’
Introduction
It is no news that the Central Bank of Nigeria (CBN), on 15 January 2016, issued a circular titled “Collection and Remittance of Statutory Charges on Receipts to Nigeria Postal Service under the Stamp Duties Act,” addressed to all deposit banks (DMBs) and Financial Institutions, enjoining them to support the Federal Government’s revenue generation drive, through compliance with the provisions of the Stamp Duties Act (2016Circular).
As garnered from the 2016Circular, it is the CBN casethat the Federal Government of Nigeria (FGN) is exploring revenue opportunities in the non-oil sectors, especially taxes and rates, as part of its efforts to boost its revenue base. It is against this background that the CBN enjoined banks and other financial institutions to support the Government’s revenue generation drive through compliance with the provisions of the Stamp Duties Act Cap. S8, Laws of the Federation of Nigeria (LFN) 2004 (SDA) and as reinforced in Suit No FHC/L/CS/ 1710/2013 – Kasmal International Services Limited v Central Bank of Nigeria (Kasmal Case).
In a bid to providing the legalbasis for the 2016Circular, the CBN, purportedly acting pursuant its powers under its enabling laws,requested that all Deposit Banks (DMBs) and other financial institutions mustensure theychargeN50 per eligibletransaction, in accordance with the provisions of the SDA and the Federal Government Financial Regulations 2009 (the Regulations). As gleaned from the 2016Circular, the instruction to charge N50 per eligible transaction includes all receipts given by any bank or other financial institution in acknowledgment of services rendered in respect of electronic transfer and teller deposits from N1,000 and above.
At this point, it is apt to mention that only the following receipts are exempted from imposition of Stamp Duties, to wit: (x) payments deposits or transfer by self to self whether inter or intra bank; and (y) any form of withdrawals/transfers from saving accounts. Worth noting is that these stamp duties are only payable by receiving accounts.
Whilst the authors are not in doubt as to the falling price of crude oil, which is ultimately telling on the economic situation in the country, the authors are concerned with the propriety of the 2016 Circular in the light of existing legal framework. Put differently, this article seeks to test the CBN Circular against the extant laws and determine whether the Circular can indeed be situated within the purview of the relevant legal framework and the case it seeks to rely on.
For a better appreciation of the points made in this article, the article is bifurcated into three sections, to wit: the first section considers whether the 2016Circular can be situated within any of provisions of the SDA and the Regulations; the second section examines the propriety of the Federal High Court case vis-à-vis its interpretation of the CBN Act and Banks and Other Financial Institutions (BOFIA); and the third section contains the authors’ recommendation and conclusion.
Legal framework
The Stamp Duties Act
It is an established principle of law that the starting and paramount point in deciphering the legality of any subsidiary legislation, be it disguised either as a guideline or a circular, is the principal statute governing that particular area. It equally follows that a subsidiary legislation cannot expand the provisions of the substantive statute and must be within the authority derived in the main enabling statute. Prior to the 2016 Circular, the CBN had issued a similar Circular in 2009 (2009 Circular) relying on the Stamp Duties Act (SDA), specifically section 89(2) of the SDA. However, the whole section and statute must be read together in order to elicit a fuller understanding of the law.It is a settled principle of interpretation that a provision of a statute should not be interpreted in isolation but rather in the context of the statute as a whole. Therefore, in construing the provisions of a Section of a statute, the whole of the statute must be read in order to determine the meaning and effect of the words being interpreted. See Buhari & Anor v. Obasanjo & Ors. (2005) 13 NWLR (Pt.941) 1 (219).
For the avoidance of doubt, Section 89(1) of the SDAprovides that “The expression “receipt” includes any note, memorandum, or writing whereby any money amounting to four naira or upwards, or any bill of exchange or promissory note for the money amounting to four naira or upwards, is acknowledged or expressed to have been received or deposited or paid, or whereby any debt or demand, or any part of a debt or demand, of the amount of four naira and upwards, is acknowledged to have been settled, satisfied, or discharged, or which signifies or imports any such acknowledgment, and whether the same is or is not signed with the name of any person.” Whilst the authors are not oblivious of the use of the word “includes,” it is quite apt to mention that word “includes,” when used in a statute or written enactment, can only enlarge the scope of the subject matter it qualifies or tends to qualify, only to an extent permitted by law. See Ports and Cargo Handlings Services Company Ltd & Ors. v. Migfo Nigeria Ltd & Anor (2012) LPELR-9725(SC).
In the same vein, it is also useful to consider the provision ofSection 89(2) SDA, which was principally relied on in the 2009 Circular issued by the CBN (to be discussed shortly). Essentially, Section 89(2) SDA provides inter alia that “theduty upon a receipt may be denoted by an adhesive stamp…”
Having reproduced the relevant provision of the SDA relied on by the CBN in issuing the CBN Circulars; it becomes apposite to test the Circulars against settled principles of law. As a preliminary point, the authors are of the considered view that the interpretation rule of expressiouniusest exclusioalteriusis very applicable to the instant case. For one, it is trite law and unassailable legal principle that the express and unambiguous mention of one thing in a statutory provision, automatically excludes any other which otherwise would have applied by implication, with regard to the same subject matter.See Nawa v. Att., Gen. Cross Rivers State (2008) ALL FWLR (Pt. 401) 807 at 843, paras. F – H (CA).
Furthermore, whilst it is possible for some to argue that a modern understanding of “receipts” should include electronic transfer, it is respectfully submitted that the definition of “receipt” in relation to stamp duties must be limited to the meaning gleaned from the SDA and the general tenor of the Act.Our submission is bolstered by the settled principle of law that where the language of a statute is clear and explicit, it ought to be given its plain and simple meaning as the said words speak for themselves, particularly as they clearly demonstrate the intention of the legislature.In addition, the authors are further fortified in the position stated in the preceding paragraph, upon a holistic read of the SDA.Notably, Part 1 of the SDA specifically relates to liability for payment of stamp duty oninstrument. Section 2 of the SDA defines “instrument” as “every written document”. Additionally, section 14(2) of the SDA which was relied upon by the CBN in its 2009 Circular provides that “an instrument falling under the particular description is so appropriated as aforesaid shall not be deemed duly stamped, unless it is stamped with the stamp so appropriated”.
• To be continued next week
