The Managing Director, Cowry Asset Management Limited, Mr. Johnson Chukwu has described as inappropriate the Central Bank of Nigeria (CBN)’s policy which requires banks to charge fifty naira (N50) stamp duty on N1000 deposited in the banks by customers.
Speaking in an interview with Primetime Reporters in Lagos on the matter, Chukwu argued that stamp duty could only be charged on receipt issued for services rendered saying that depositing money in one’s bank account in the bank did not amount to paying for services in the real sense of it.
He maintained that imposing a stamp duty payment on lodgement into bank accounts amount to taxing the capital of people which he believed was not the intention of the government.
According to him,” I have major concerns about the stamp duty. Stamp duty can only be charged on receipt issued for services rendered. Depositing money in your bank account does not amount to paying for services in the context of it. It does not amount to consideration for which you are exchanging your money for a service.
“So, if you impose stamp duty on lodgement into bank accounts, what we are doing is that we are taxing capital of people and i don’t think the intention of government is to tax capital of people and that tax is based on profit. Capital gains you are taxing is based on consumption.
“But to now tax people’s principal will actually work against the objective liquidity in the system because people will now keep their money away from banks and expose themselves to risks of theft and robbery.
“So, government should impose tax on revenue, people’s income or people’s consumption not on people’s capital. When you deposit your money and they tax it and you withdraw your money, your money gets shorter than what it was, how do you account for that?
“If you are a retail stall owner and you receive your value through electronic payment and you have 1000 transactions in a day because people are buying things for N1,400, N2, 000, N1,020, then you pay N50 multiplied by 1000, your profit may not even be up to that because your margins are low. To the effect that what government wants to do is to tax people’s capital. I think they have to re-evaluate that”.
Send your news, press releases/articles to info@primetimereporters.com. Also, follow us on Twitter @reportersinfo and on Facebook at facebook.com/primetimereporters or call the editor on 07030661526.
