The Federal Government has mandated all Deposit Money Banks to immediately start the deduction of the 0.375 per cent stamp duty charge on all mortgaged-backed loans and bonds.
Mortgage-backed loans and bonds are debt securities issued by governments, municipalities, corporations, or other entities to raise capital, while mortgage-backed loans are loans extended by financial institutions to individuals or entities to purchase a home and repay the loan over time with interest.
The new Directive has been contained in a message sent to customers by the banks, as directed by the Federal Inland Revenue Service, according to The Punch.
It shows that the government is expanding the reach of stamp duty charges to include foreign transactions and loans, with regular bank transfers, as part of efforts by the tax authority to enhance fiscal performance.
Access Bank in the email to customers on Thursday wrote, “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.”
It stated however that the directive did not apply to existing loans, which will be repaid in full under the terms and conditions provided for.
“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.
Recall that in January, banks were mandated to deduct stamp duty on existing international transactions from January 2021 until December 2023.
Also, the electronic money transfer levy was introduced to accounts receiving electronic deposits of N10,000 and above or its equivalent.
