The Federal Government has directed all Ministries, Departments and Agencies to immediately stop deducting the one per cent stamp duty previously charged on payments to contractors, vendors, suppliers and service providers, in line with the provisions of the Nigeria Tax Act 2025.

The directive was conveyed in a Federal Treasury Circular dated June 15, 2026, and signed by the Accountant-General of the Federation, Shamseldeen Ogunjimi.

According to the circular, the Nigeria Tax Act 2025 clarifies that stamp duty applies to chargeable instruments and not to payment transactions. As a result, the longstanding practice of deducting one per cent stamp duty from government payments is no longer consistent with the country’s current tax framework.

The Office of the Accountant-General of the Federation said the directive was issued to ensure full compliance with the provisions of the Nigeria Tax Act 2025 and to eliminate the improper application of statutory deductions on government payments.

“In view of the above and in order to ensure strict compliance with the provisions of the Nigeria Tax Act 2025, as well as to prevent the misapplication of statutory deductions, all MDAs are hereby directed to note that the Nigeria Tax Act 2025 provides that stamp duty is imposed on chargeable instruments and not on payment transactions,” the circular stated.

The circular further directed MDAs to immediately stop the deduction of the one per cent stamp duty from payments made to contractors, vendors, suppliers and service providers, and to ensure that stamp duty is only charged, deducted or remitted in cases expressly provided for under the Nigeria Tax Act 2025.

The Accountant-General stated that, under the new tax framework, stamp duty applies strictly to instruments and transactions specifically designated as chargeable under the Act and its schedules.

The circular, however, clarified that any stamp duties lawfully deducted before the commencement of the Nigeria Tax Act 2025 would remain valid and protected under the Act’s savings provisions.

The circular also noted that the Nigeria Tax Act 2025, which came into effect on January 1, 2026, now serves as the legal framework for the administration of stamp duties in the country.

According to the government, contracts awarded before the commencement date will continue to be governed by the previous stamp duty regime, while contracts awarded on or after January 1, 2026, will be subject to the provisions of the new law.

The circular further attached the Ninth Schedule of the Nigeria Tax Act 2025, which lists instruments that remain liable to stamp duty. These include agreements for the sale of real property, annuities, assignments, bonds, bills of exchange, nominal shares, loan capital and contract notes relating to marketable securities. Applicable rates range from 0.04 per cent to 1.5 per cent, depending on the type of instrument or transaction involved.

The circular was addressed to key government officials and institutions, including ministers, permanent secretaries, heads of extra-ministerial departments and agencies, directors of finance and accounts, internal auditors, federal pay officers and heads of diplomatic missions. They were directed to give the directive the widest possible circulation and ensure strict compliance.

The latest directive effectively reverses a 2017 Treasury Circular, under which MDAs were required to deduct and remit one per cent stamp duty on payments made to contractors, suppliers and other service providers as part of the government’s revenue mobilisation efforts.