N5tr revenue threatened as court stops N50 stamp duty
The Federal Government’s bid to raise N5 trillion revenue is under threat as an Abuja Federal High Court yesterday stopped the Nigerian Postal Services NIPOST, from further collecting N50 on stamp duty.
The court held that such revenue drive by NIPOST does not enjoy the backing of any extant law in the country including the Stamp Duties Act 2004. The court judgment followed a suit by the Nigerian Bottling Company, NBC, against NIPOST and Kasmal International Services.
Justice Gabriel Kolawole, delivering the verdict held that having carefully gone through the Stamp Duties Act 2004, he could not see where NIPOST was empowered by the law to impose stamp duty tax on the bottling company, banks and other establishments.
According to Kolawole, whereas the Act recommended two (2) kobo stamp to be affixed on certain categories of documents, NIPOST lacked the power to arbitrarily increase the amount to N50 without firstly securing an amendment of the Act through the National Assembly.
“A law is a law and has to be obeyed or implemented as it is. Section 89 of the Stamp Duties Act, which recommended the use of adhesive 2 kobo stamp on certain categories of receipts and document, is the law in force.
“The NIPOST as a defendant in this suit acted unlawfully, illegally and ultra-vires by unilaterally increasing the 2 kobo stamp to N50 without any back up law and under the guise that 2 kobo stamps are no longer in circulation in Nigeria.
“Under Section 89 of this Act, the NIPOST has no power to compel the plaintiff (NBC) to affix N50 stamp on its receipts and other documents. “By this, NIPOST has no business or authority in sending Kasmal International Services on illegal errand to compel the plaintiff on the N50 stamp duty tax.”
Consequently, the court issued an order of injunction against the NIPOST and Kasmal International Services, stopping them from further harassing, embarrassing, intimidating, coercing or disrupting the business operation of the plaintiff in the name of unlawful stamp duty tax until the extant laws are reviewed.
More so, Justice Kolawole recalled that the Lagos Division of the Court of Appeal had earlier delivered judgment on the same issue. He said the Federal High Court, being a lower court, cannot afford to depart from the precedent of a Superior Court as regards the judgment until the highest court in the country has set such a precedent aside.
The NBC had through its counsel, Mr. Ayokunle Adesomoju, sued NIPOST and Kasmal International Services, praying for an order to declare the stamp duty tax as illegal, unlawful and ultra-vires.
The plaintiff also applied for a perpetual order of injunction stopping the two defendants from invading, harassing, embarrassing and disrupting its business operations across the country on the pretext of seeking internal revenue for the federal government.
NIPOST had through its counsel Mr. Salihu Wakawa, prayed the court to dismiss the suit, insisting that granting reliefs sought by the plaintiff would occasion great injustice and jeopardise the revenue drive of the Federal Government.
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