The Special Adviser to the Executive Chairman of the Lagos State Internal Revenue Service (LIRS), Tokunbo Akande, has provided much-needed clarity regarding stamp duty.
He stressed that it should be recognised as a revenue stamp, with no association with postage stamps.
Akande shared this information during his appearance as a guest on a national Television’s Tax Talk program.
He emphasised that contrary to popular belief, stamps serve a broader purpose beyond courier services.
Their primary role is to authenticate transactions between entities, be they corporations or individuals.
The stamp duty framework exists to validate documents related to these transactions, ensuring their legal admissibility in the event of disputes.
He said, “It’s interesting to note that stamp duty, a tax law that dates back to 1939, is still in effect today. Although it was reenacted in 2004 and has been updated over time through the Finance Act, the basic premise remains the same.
“Stamp duty places the responsibility on those involved in certain transactions to provide documentation that explains the details of the transaction.
For example, if someone purchases an item from another person, a receipt is given to show the transaction.
This receipt must be stamped to be considered admissible evidence in court in case any disputes arise. In the past, the postal stamp was used to denote the stamp duty.”
According to Akande, Stamp duty has made a substantial impact on revenue generation in Lagos State, netting the state over N5 million in recent years.
The agency holds the view that there are still opportunities for improvement.
While stating that the agency was considering the introduction of revenue stamps for wholesalers and distributors for receipts over N10,000 in the state, he noted:
“This approach was previously utilised in the 1970s, and we are eager to revitalise it. We are fully committed to engagement and process improvement.”
He said the agency had taken the step of digitising its stamp duty operation by transitioning from manual to electronic processes.
According to Akande, “The Joint Tax Board (JTB), which oversees all Internal Revenue Services (IRS), the Federal Inland Revenue Service (FIRS), customs, immigration, and other related bodies, has been at the forefront of promoting awareness about stamp duty in general.
“LIRS (Lagos State Internal Revenue Service) has also made significant efforts in this area by holding town hall meetings, issuing public notices and guidance notes, and engaging with professional bodies.
“However, despite these efforts, the message has not been fully received.
“It is important to note that the law requires that all transactions between two entities must be stamped, and even items such as cheques have a small stamp on them.
“This is because they may be admissible in court. Therefore, it is your responsibility to ensure that any documents related to transactions above a certain level of expenses are properly stamped, as failure to do so renders them as ordinary paper.”
He mentioned that LIRS has extended its reach to multiple states, strategically situating offices for improved taxpayer service. Furthermore, he highlighted the presence of LIRS officials who are readily available to provide support during legal proceedings, emphasising their accessibility with desks in all Lagos courts.
“Our team of experts ensures that all necessary documents are properly stamped and verified by the commissioner for stamp duty. We take record-keeping seriously, as it helps to ensure the authenticity of all documents that pass through our hands. Proper stamping of documents is essential, whether you’re borrowing money from a bank or renting a property.
“Failure to do so could render them inadmissible in court. We are here to help certify your documents and ensure they have the necessary stamps to make them legally binding,” Akande submitted.Follow us on social media