LAGOS, Nigeria (VOICE OF NAIJA) – The Federal Inland Revenue Service (FIRS), has directed Deposit Money Banks to enforce the deduction of 0.375 per cent stamp duty charge on all mortgaged-backed loans and bonds with immediate effect.
This was contained in a message sent to customers on Thursday by banks, as ordered by the federal government agency on tax collection.
Mortgage-backed loans are loans extended by financial institutions to individuals or entities to buy a home and repay the loan amount over time with interest while bonds are debt securities issued by governments, municipalities, corporations, or other entities to raise capital.
This decision clarifies the government position and efforts to enhance fiscal performance.
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Recall that banks were also in January directed to deduct stamp duty on old foreign transactions between January 2021 and December 2023 by January 31, 2024.
Previously, the stamp duty levy was mandated on accounts receiving electronic deposits of N10,000 and above or its equivalent.
Access Bank informed customers on Thursday via an electronic message that banks have been directed to deduct a certain amount of money for stamp duty on legal mortgages asap.
The message read, “We would like to inform you that the Federal Inland Revenue Service has directed all Nigerian banks to implement stamp duty on certain transactions that require duty payments such as contracts and legal mortgages.
“In compliance with this directive, we have taken measures to streamline the process to make transactions more convenient for you.
“To this end, a stamp duty charge of 0.375 per cent will be applied to loans backed by legal mortgages, shares, debentures, or bonds. The charge will be applied to the value of the Legal Mortgage, Shares, Debentures or Bonds and remitted to the Federal Inland Revenue Services.”
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The announcement states further that the new directive exclude previously approved loans with compliance to agreed terms and conditions.
“However, all previously approved loans will remain unchanged and should be repaid in full as per the agreed terms and conditions. We are committed to providing you with exceptional service,” the notice stated.
Punch