Samson Akintaro 
…raises expected stamp duty revenue to N500bn
The Federal Government has said it hopes to fund part of its projected N12.6 trillion 2021 budget with an expected N1.7 trillion from Value Added Tax (VAT). This, the government said, would be achieved by bringing more people into the tax net with the effective implementation of the provisions of the Finance Act 2019 and improving collection efficiency. According to the 2021– 2023 Medium Term Expenditure Framework (MTEF) sumption, taking into account ‘vatable’ items and collection efficiency.
Aggregate consumption in the country is estimated at N118.89 trillion in 2021 from N117.91 trillion estimated for 2020. “The VAT projections over the medium-term are based on holding the rate at 7.5 per cent. “Wider coverage and improved collection efficiency will be achieved through continuous nationwide VAT registration and monitoring, as well as the use of technology for auto-collect platforms in more sectors of the economy. Besides, the solution to deduct and remit VAT and WHT from state government contract payments is to be deployed to all the 36 states.
“Efforts will be made to increase VAT collection efficiency significantly in the medium term,” the government stated in the document. In 2019, the Federal Government was said to have realised N1.1 trillion from VAT. Relying on the increase of 2.5 per cent which took effect in February this year, the government had projected N2 trillion VAT in the 2020 budget, which makes the 2021 projection 15 per cent lower. While N2.53 trillion or 41.1 per cent of the projected income was expected to come from oil-related sources, and the remaining from non-oil sources, the government said it expects to raise N500 billion from stamp duty, up from N200 billion projected for this year.
Stamp Duties payment is enabled by the Stamp Duties Act (SDA) 1939, as amended by numerous Acts and various resolutions contained in the Laws of the Federation of Nigeria. Last year, the total Stamp Duty collected by the government stood at N18 billion.
To achieve the projected increased revenue from the duties, which are paid on a long list of deals, which include bank transactions, the Federal Inland Revenue Service (FIRS), on Wednesday, directed landlords and property agents to charge six per cent Stamp Duty on all tenancy and lease agreements.
The landlords/property agents are to remit such collections to FIRS “so that they do not run foul of the Stamp Duty Act.” and Fiscal Strategy Paper (FSP), submitted to the National Assembly on Tuesday, the N1.7 trillion was arrived at using projected aggregate nominal con-
