Offences And Penalties Under The Stamp Duties Act

• Published date: 02 April 2024
• Subject Matter: Corporate/Commercial Law, Insurance, Tax, Compliance, Corporate and Company Law, Contracts and Commercial Law, Insurance Laws and Products, Tax Authorities
• Law Firm: SimmonsCooper Partners
• Author: Mr Samuel Oyenitun and Paul Ordam

Stamp duties are indirect taxes/charges for a stamp or seal applied on a written or electronic document which if executed, makes it a legal document and will be admissible in any court of law. These taxes are imposed on various types of documents including but are not limited to sale of land agreements, tenancy agreements, contracts, and documents such as cheques, letters, promissory notes, certificates of admission, and insurance policies etc. These taxes are usually paid to the Federal Inland Revenue Services at the federal level and by the State Internal Revenue Services at the state level.

The Stamp Duties Act ("SDA" or "Act")¹ , which governs the administration of stamp duties in Nigeria, is one of Nigeria's oldest Acts, and has been significantly shaped by amendments through various Finance Acts. One peculiarity with the SDA is its approach to listing offences and penalties. Unlike other laws where offences and penalties are neatly categorized, the SDA integrates them throughout the Act.

Despite this, it primarily imposes monetary penalties for offences, which generally range from N20 (Twenty Naira) to N100 (One Hundred Naira), rather than terms of imprisonment found in other statutes. This article aims to outline the primary offences and penalties as specified in the amended SDA and to provide an overview of the general rates for stamp duties.

1. Handling Adhesive Stamps Incorrectly (Section 13 of the SDA): This provision addresses the misuse of adhesive stamps, a critical component in the validation of documents. If an individual engages in fraudulent activities, such as removing an adhesive stamp from one document to use on another, selling, or offering for sale a previously used adhesive stamp, they are committing a serious offence. The law is clear on the consequences a conviction leads to a fine of N100 (One Hundred Naira).
2. Dual Assessment of Same Document by Commissioners (Section 20 of the SDA): The Act prohibits the scenario where two commissioners of Stamp Duty independently assess the same instrument, whether motivated by personal gain or other reasons The offender shall be guilty of an offence and liable on conviction to a fine of N20 (Twenty Naira).
3. Failure to Properly Stamp Documents Ad Valorem (Section 23 (3) of the SDA): This section mandates that all instruments subject to ad valorem duty—a tax based on the value of the document—must be properly stamped within 30 days from their first execution. Failure to comply with this...