In a recent move aimed at bolstering fiscal performance, the Federal Government has instructed Deposit Money Banks to commence the deduction of a 0.375 per cent stamp duty charge on all mortgage-backed loans and bonds. This directive, conveyed through a message to customers by banks as per the Federal Inland Revenue Service’s instructions, signals an expansion of the stamp duty charges to encompass foreign transactions and loans, in addition to regular bank transfers.
Mortgage-backed loans, which constitute loans provided by financial institutions to individuals or entities for purchasing homes, and bonds, which are debt securities issued by various entities to raise capital, will now be subjected to the stamp duty charge. This measure underscores the government’s commitment to enhancing fiscal performance through a broader tax base.
This latest directive comes on the heels of a previous mandate issued in January, where banks were directed to deduct stamp duty on old foreign transactions spanning from January 2021 to December 2023 by January 31, 2024. Notably, this move expands the scope of stamp duty charges, which were previously applicable primarily to electronic deposits exceeding N10,000 or its equivalent.
Financial Experts say the move underscores the government’s proactive stance in ensuring revenue generation and compliance with tax obligations across various financial transactions. It aligns with broader efforts to fortify fiscal frameworks and enhance revenue collection mechanisms amidst evolving economic landscapes.
