A recent directive from the Federal Government instructs Deposit Money Banks to commence immediate deduction of a 0.375% stamp duty charge on all mortgage-backed loans and bonds.
Mortgage-backed loans involve financial institutions extending loans to individuals or entities for home purchases, with repayment over time with interest, while bonds are debt securities issued by various entities to raise capital.
This new mandate, relayed to customers by banks as per the Federal Inland Revenue Service, expands the stamp duty charges to cover foreign transactions and loans, in addition to regular bank transfers, aligning with the tax authority’s efforts to improve fiscal performance.
In a related development, banks were previously instructed in January to deduct stamp duty on old foreign transactions from January 2021 to December 2023 by January 31, 2024.
Previously, the electronic money transfer levy was only applied to accounts receiving electronic deposits of N10,000 and above or equivalent sums.
Access Bank, in an electronic alert to customers on Thursday concerning the deduction, stated, “We wish to inform you that the Federal Inland Revenue Service has mandated all Nigerian banks to implement stamp duty on specific transactions necessitating such payments, like contracts and legal mortgages.
“To comply with this directive, we have streamlined the process to enhance transaction convenience for you.
“Consequently, a 0.375% stamp duty charge will be levied on loans backed by legal mortgages, shares, debentures, or bonds. The charge will apply to the value of the Legal Mortgage, Shares, Debentures, or Bonds and will be remitted to the Federal Inland Revenue Service.”
The notice further clarified that this directive does not impact previously approved loans, which will continue to be repaid in full as per the agreed terms and conditions.
“All previously approved loans will remain unaffected and must be repaid in full per the approved terms and conditions. We are dedicated to delivering exceptional service,” as outlined in the notice.