Stamp Duty: Facts Nigerians Need To Have – By Garba Shehu
President Muhammadu Buhari came into office in 2015 to find that a law, which stipulated for the collection of a token on banking transactions existed but was not being correctly implemented
This anomaly arose because certain characters apparently formed a cartel with collaborators in the Nigerian Postal Service, NIPOST and were allegedly collecting and pocketing this money.
Soon after, a non-government organization posited to the administration that the Nigerian government had lost the sum of over N20 trillion to the Nigerian Inter-bank Settlement System ((NIBSS) between 2013-2016 in this regard, claiming that the said sum could be recovered and paid back into the government coffers.
The consultants asked to be paid a professional fee of 7.5 percent and were placed under the supervision of the Secretary to the Government of the Federation, SGF.
Following the lack of progress in the promised recovery, the late Chief of Staff to the President, Abba Kyari wrote on March 8, 2018 to the SGF conveying a presidential directive that following the lack of progress and several expressed concerns received, the activities of the consultants be discontinued.
In the aftermath of this dismissal, the consultants sued the government.
A court of competent jurisdiction subsequently ruled in favour of the government.
Arising from the outcome of the litigation and the well known controversy on the legally responsible agent for collecting this levy, the administration went to the National Assembly and caused an amendment to the law and removed NIPOST from the duty of its collection.
Having lost a potentially “lucrative” line of “business,” the sacked characters returned to the drawing board to formulate one form of trick or another to intimidate the government but the vigilant teams of the administration kept them at bay.
Lately, they returned to the government through Hon. Muhammadu Gudaji Kazaure with a plan to track the so-called lost stamp duties with the erstwhile consultant as chairman and Hon. Gudaji as secretary.
When it emerged that the petitioner and lead consultant of the committee the President had dissolved via the late Abba Kyari’s letter of March 28 had masqueraded himself and re-emerged as the chairman of the new recovery committee championed by the Hon. Gudaji, the President rescinded the approval he gave and asked that it be stopped from operating under the seal of his office.
In addition to this committee being chaired by a petitioner, there were also other concerns relating to natural justice and fair hearing in having the Chief Justice of the Federation as a committee member and a serving member of the House of Representatives as Secretary, which are not in line with Section 5(1),(a)&(b) of the 1999 constitution of the Federal Republic of Nigeria (as amended).
Once the President rescinded his approval to constitute this Committee, lost all legitimacy.
Arguments have in recent days been flying left and right over the rightfulness of a committee being dissolved.
People are entitled to hold opinions. But these opinions do not change the fact that under our constitution, the power of the president to appoint and remove persons or groups is duly entrenched and unless such powers are shared with the Parliament, the President can hire and fire literally at will, and in line with the law.
To go back to the main issue though, it is now evident that the consultants and petitioners’ claims of a missing N89 trillion from stamp duty appears false and a figment of their malicious imaginations.
The same set of consultants claimed in 2016 there was N20 trillion to be collected. It was found to be false. The entire banking sector deposit is not even up to half of N89 trillion.
Indeed, if the Federal Government can find N89 trillion Naira, it can pay off all its debt, both foreign and local currency and all state government debts and still have over N10 trillion left.
So, the claim by these so-called consultants and the disbanded committee is totally ridiculous and a complete mockery.
Our good friend and a committed party member, Hon Gudaji has tried to draw me into a public debate which I don’t consider a good idea.
In a video clip in Hausa and a press release in English both by this good friend of the administration, Hon. Gudaji Kazaure, invited me to answer questions, some of which are completely lacking in imagination.
I would have ignored the allegations therein. Yet, a wise man once said that a lie can travel the world while the truth is still wearing his shoes.
It is on the basis of the above that I decided to put some things straight and respond directly to Hon. Kazaure’s questions posed to me.
Specifically, I will respond to each of his questions as follows:
(A) “The money with CBN I & E window Account stood at $171 billion dollars as at 2020 what is the source of that money?”
To my knowledge, the CBN-established Investors and Exporters (I&E) Window is a foreign exchange trading platform where banks and other authorized dealers can buy or sell foreign exchange. These trades are recorded by the CBN daily and reported as turnover or activity in the market.
Contrary to Hon. Kazaure’s assertion, the I&E window is NOT an “account” where foreign exchange is deposited. It is simply a platform for trading foreign exchange. As of April 2020, the total amount of foreign exchange traded (either bought or sold) in the window was about $171 billion. The size of this amount suggests that there is adequate liquidity or availability of foreign exchange and that anyone who wants to buy or sell would easily find a counterparty to trade with. The amount does not mean that we have $171 billion stacked away in some vault or saved in any account.
Note that both the CBN and authorized dealers are free to bring foreign exchange to the window, and in fact, the CBN is not the major seller of Foreign Exchange in that segment of the market.
(B) “The N23.4 trillion CBN gave as a loan to some banks, what is the source of that money?”
The CBN is best placed to respond to this question though I must say the assertion itself is both baseless and misleading. The total balance sheet of the CBN is not anywhere near N23 trillion. So how can it give such an amount in loans to any or some banks?
(C) “The N13 trillion loan to the federal government from FMDQ, what is the source of that?”
According to the DMO, the total amount of Nigeria’s domestic debt as of September 2022 is N21.6 trillion. Is Hon. Kazaure suggesting that a small company in Lagos holds over 60 percent of Nigeria’s domestic debt? More also, of the N21.6 trillion domestic debt, only N4.5 trillion are in Treasury Bills? How then can a company in Lagos hold more treasury bills (N13 trillion) than the entire treasury bills issued by the Federal Government? For the avoidance of doubt, I also took time to reach out to the FMDQ ( Financial Markets Derivative Quotes) and understand from their audited financial statements that their holdings of FGN Treasury bills is just N7.99 billion as of December 2021.
(D) “Finally, what is the total equity of CBN and its National budget?”
Anyone who understands this question should provide an answer. I can offer this information: on an annual basis and in line with the Fiscal Responsibility Act, the CBN transfers 80 percent of its operating surplus to the Federal Government as part of the budget revenues. In the last 6 years, this contribution has amounted to over N150 billion.
Let me inform, that Mr. President has not completely ignored these matters. Indeed, a duly authorized committee under the Attorney-General and Minister of Justice, Abubakar Malami (SAN) is working to reconcile, recover and transfer all Stamp Duties into Stamp Duties Central Account.
The work is ongoing, it is not finished yet and the President will continue to show his keen interest in the matter of Stamp Duty collection.
*Shehu is Senior Special Assistant on Media and Publicity to President Buhari