By Tijani Abubakar
There is a need to recognize and highlight the recent reports which sufficiently indicated that Nigeria’s next phase in national budget benchmarking may not be from oil but Stamp Duty and its huge potential to serve as a springboard for budget financing, especially capital expenditure projections. This does not come cheap but through the dint of hard work, sheer innovation and commitment to patriotic service to the country.
This is the message that the nation’s apex revenue collection agency, the Federal Inland Revenue Services (FIRS), is passing to the country. That is, with appropriate reform of the system, right mindset and dedication, Nigeria’s economy can thrive even in the midst of COVID-19 pandemic with its massive humanitarian and socioeconomic woes. This is what the executive chairman of FIRS, Mr. Muhammadu Nami, has revealed recently.
But of course, many people are wondering how this can be achieved under the present difficult socioeconomic challenges bedeviling the country. That is, definitely, the right question critical minds have been asking since the introduction and implementation of Stamp Duty by the Nami-led FIRS.
However, this point was well captured by the executive chairman of FIRS in this lucid and inspiring explanation: “My optimism stems from the fact that Stamp Duty has the potential to yield tax revenue in the region of trillions of naira per annum. For instance, after we carried out an analysis of transactions in the banking sector, we discovered that in 2019 alone, the total volume of transactions both chargeable and non-chargeable was over N52 billion of which the total value of transactions was over N613 trillion. If you compute N50 Stamp Duty on the chargeable transactions, of course, your guess is as good as mine.
From all indications, only a great mind and patriotic elite thinks this way and did not stop at the realm of such a creative and beautiful idea but went on to strategise on how to actualise same and today, Stamp Duty implementation is not only a reality but a major booster to the national revenue generation for Nigeria. This is to the extent that out of the federal allocation shared by the three tiers of government last month of July, 2020, revenue generated contributed N500 billion (about 70%) of what was shared!
What news can be better than this for a country struggling to navigate its way through a cloudy economic atmosphere created by Coronavirus pandemic?
It would be recalled that since the advent of the deadly pandemic, the Nigerian government through the Federal Ministry of Finance has been lamenting the zero level crash of crude oil prices at the international market because countries closed their international land, water and air borders as part of stringent measures to stop the spread of the virus. Multilateral and bilateral trade relations where suspended. Budget financing became a central issue in national development matters.
Of course, for a country whose economy depends only on oil to breathe, the times are stormy and wild. Thank God the FIRS under the executive chairman, Mr. Nami, came up with the launching of “the next black gold”, as Stamp Duty has been dubbed by Mr. Nami himself.
It should be underlined that as an incontrovertible evidence of the predictable significance of this new policy to the fiscal policy objectives of the President Muhammadu Buhari administration, FIRS recently announced the sum of N66billion Stamp Duty remittance to the federation account, the collection of five months (January to May 2020) Stamp Duty. With renewed vigour demonstrated by the inauguration of Inter-ministerial Committee on the Audit and Recovery of Stamp Duty and subsequent launch of FIRS Adhesive Stamp in Abuja recently, the hope of raising revenue target bar through Stamp Duty is even brighter and higher.
Experts are quite optimistic that with the way the FIRS is currently leading the aggressive campaign for Stamp Duty implementation with it determined, trained and equipped staff, the forecast is even brighter for the country’s national revenue projection.
It is on this note that Mrs Ade Adams, an expert in taxation and fiscal policy management posited that all hands must be on deck to support FIRS on stamp duty implementation. According to her, “It is important that all stakeholders in the economic and financial sectors, state governments, federal law makers, all those in the tax net, the media and the entire citizens see the full import of the transformational policies and drive of Mr. Nami and give their maximum support and cooperation. He is a rare gem and the real deal for Nigeria’s COVID-19 and post COVID-19 economy in the present dispensation”.
As has been widely acclaimed by stakeholders, Nami has brought innovative ideas to the national revenue, especially with the recent launch of Stamp Duty. This new policy backed up by law is designed to improve revenue drive of the federal government as an option to the uncertain, unpredictable crude oil prices. Finally, Nigeria is getting it right in national income diversification.
*Abubakar is retired banker based in Ilorin, Kwara State