Recently, the Central Bank of Nigeria, CBN, directed banks to strictly implement a N50 stamp duty on every transaction starting from N1,000.
The decision is not unconnected with the fall in global oil prices which has affected Nigeria in numerous ways and, in a bid to save the currency and the country’s revenue generation, several stringent measures have been put in place by the Central Bank of Nigeria (CBN).
The new policy which is in compliance with the provisions of the Stamp Duty Act 2004 and the Federal Government of Nigeria’s (FGN) Financial Regulation of 2009, includes all receipts by a bank or financial institution in acknowledgement of services rendered, in respect of teller deposits and electronic transfers for the value of N1000 and above. The N50 stamp duty will be charged per transaction and not per volume that is from N1,000 and above.
CBN said policy affects only current account holders. Savings accounts, salary accounts and student savings accounts are exempted. Other exemptions specified are payments of salaries and wages, deposits, or self-to-self transactions, whether inter or intra bank.
As expected, some Nigerians have expressed their dissatisfaction with the introduction of the stamp duty charge which comes on the heels of the ban on Commission on Turnover, CoT, charges by banks. Some analysts have described the action as amounting to the reintroduction of proscribed CoT charge through the back door.
Indeed, it could be rightly said that the CBN has indirectly reintroduced a negotiable CoT as a current account maintenance fee across all commercial banks.
The compulsory imposition of stamp duty on bank customers adds to the unclear monetary strategy of the CBN . Last year, the CBN announced, in a circular titled “Implementation of Revised Guide to Bank Charges –Commission on Turnover,” that a zero-commission on turnover would commence in January 2016 stating, affirmatively, that there was no going back on the implementation of the policy. However, it appears the CBN failed to take into consideration how much banks could lose from the implementation of this policy.
According to the former Executive Director of Keystone Bank, Richard Obire, 70 percent of the total revenue generated by Nigerian banks comes mainly from interests gotten on loans, while ‘fees and commissions’ account for the rest. CoT alone contributes over 60 percent to the ‘fees and commissions income’ section, which shows commercial banks would inevitably face revenue challenges with the CBN’s former plan to adopt a zero-commission on turnover.
Despite strong protest by banks following this decision, the CBN remained adamant on the zero CoT policy which would see banks lose about N100 billion (out of N550 billion) in annual revenue. The reintroduction of the CoT as current account maintenance charge shows a confused CBN which probably needs a minister that can foretell the future in its policy implementation.
A review of CBN policies, last year, bred doubt and unease among Nigerians which means the apex bank needs to understand that its mandate is to promote and safeguard a sound financial system in Nigeria by initiating thoughtful policies, rather than to work on assumptions during this very critical period. The current confusion in the foreign exchange market, Naira devaluation, domiciliary account deposits, etc are other pointers to the apex bank’s policy somersaults which need to be urgently checked.

READ ALSO  Repositioning Nigeria’s tourism sector