President Muhammadu Buhari has been asked to call the minister of finance Zainab Ahmed to order over plans to move electronic collection of stamp duty from Nigerian Postal service to the federal inland revenue service
At a briefing in Abuja by the Senior staff of statutory and Government owned companies, SSASGOC workers, led by the Secretary General, Olorunfemi Kayode, the union said the move will lead to loss of jobs
SSASCGOC/NIPOST/C-I-C/1/2019 27TH NOVEMBER, 2019
HIS EXCELLENCY,
HON. FEMI GBAJAMILA
THE SPEAKER HOUSE OF REPRESENTATIVES,
FEDERAL REPUBLIC OF NIGERIA,
THREE ARMS ZONE,
ABUJA.
THE PLAN TO REMOVE ONE OF THE CORE MANDATES OF THE NIGERIAN POSTAL SERVICE (NIPOST) – A CALL FOR CAUTION
The entire members and leadership of the Senior Staff Association of Statutory Corporations and Government Owned Companies (SSASCGOC) extends their sincere compliments and utmost respect to the Hon. Speaker and to most respectfully alert his good offices over what we perceive as unholy attempt to remove provision of stamps for denotation of receipts, documents and other instruments by Nigerian Postal Service (NIPOST) as one of its core functions/mandates.
2. Your Excellency, SSASCGOC is one of the registered and recognized Trade Unions in Nigeria. Our jurisdiction as contained in the Trade Union Acts covers all Senior Staff of States and Federal Statutory Corporations and Government Owned Companies. All the Senior Staff members of NIPOST are bonafide members.
3. Your Excellency will recall that the Post Office which metamorphosized into NIPOST was a pre-independence creation. It should also be noted that from independence to date, there had been series of amendments that had been made into the current statute that established the organization.
4. Your Excellency sir, as a responsible Trade Union, we appreciate the efforts, commitment, including the sacrifices you are putting into the reconstruction of the Federal Republic of Nigeria and the need for the support of all of us. It is against this back drop that we have decided to alert you of the impending attempt by the Honourable Minister of Finance in collaboration with the Federal Inland Revenue Service (FIRS) to KILL AND BURY the NIPOST.
5. Sir, you will recall that NIPOST was a major hub for commercial activities including financial inclusion for most towns and villages in the 70s through the 80s to the early 90s. NIPOST was the cynosure of development those years. That is why we identify with your excellency in your strides aimed at bringing back the lost glory.
6. Your Excellency will also note that Postal Service is a Universal project for which Nigeria is a major player. Therefore, any attempt to KILL it should be resisted by all of us especially those of us that are driven by quest for National Development. Currently, NIPOST is positioned to cause massive grassroot development through rural financial inclusion, agent of social mobilization and provision of a very strong platform for efficient management of security challenges. It is also currently involved in the payment of conditional cash transfer to the less privilege in Kebbi, Edo, Ondo and Enugu states. These cannot work effectively if the attempt by the Minister of Finance to take away the collection of the N50.00 electronic stamp duty to denote electronic receipts, documents and other instruments is not checked since the cost of collection for NIPOST on this electronic transactions will further enable NIPOST to improve its decrepit infrastructure for better service delivery and performance. This is more so because NIPOST had not been on Government Capital project Budget for the past twenty (20) years.
7. Your Excellency, we are bold to say that the migration from physical issuance of postage stamp to denote receipts, documents and other instruments to electronic issuance of same cannot in anyway means change of ownership. NIPOST had been issuing the physical stamps with which the denotation was done and it is also already properly and technologically equipped to issue electronic stamps at infinitesimal cost of collection. The action of the Honourable Minister of Finance simply implies that NIPOST should be denied funding so as to make it unable for NIPOST to perform its statutory role/function.
Your Excellency may wish to be informedthat historically the earliest legislation on stamp duties or stamp fees collection was the Stamp Duties Ordinance of 1939,which was a colonial legislation. The legislation provided for the use of adhesive stamp for the denotation of documents. It is important to state that the only adhesive stamp in place then was the adhesive postage stampwhich can only be purchased/procured from the Post Office. In 1958, the Income Tax Revenue Ordinance of that year established the Board of Internal Revenue and the Ordinance gave greater impetus for the use of adhesive postage stamp to denote agreements, receipts and other instruments. In 1960, the Lagos Stock Exchange was established and continued with the use of adhesive postage stamp to denote contract notes and other instruments. This is to show that the use of adhesive postage stamps to denote receipts, documents and other instruments predates the establishment of the Federal Inland Revenue Service (FIRS) and State Board of Internal Revenue Services (SBIRS) respectively. It is important to point out that even when a more detailed legislation was enacted in 2004 – Stamp duties Act Cap S8 Laws of the Federation 2004, it still contains copious provisions giving NIPOST prominent role in the use of adhesive stamp to denote receipts, document and other instruments.
8. Your Excellency may wish to be further informed that by the provisions of the Nigerian Postal Service (NIPOST) Act Cap N127 Laws of the Federation of Nigeria 2004 (hereinafter referred to as NIPOST Act), NIPOST was established and in addition to all other duties and functions provided for in the Act, granted exclusive power to NIPOST to PRINT, PRODUCE, PROVIDE, ISSUEetc adhesive postage stamp in the Federal Republic of Nigeria. It is important at this juncture to state that prior to the introduction of Information Communication Technology (ICT) into governance and economic transactions, individuals and companies desiring to comply with provisions of the Stamp Duties Act to denote their receipts, documents and other instruments walk in into the Post Office, purchase their adhesive stamp and thereafter affix same on their receipts, documents and other instruments to denote same without any form of force or coercion. However, since the advent of ICT in the country, most transactions that were consummated and concluded manually began to change form into electronic transactions to which electronic receipts are issued without same being denoted and thus loosing the revenue that ought to have been generated through the purchase and denotation of such instruments with adhesive postage stamps as required by the Stamp Duties Act. NIPOST observed this trend for a while and noticed that due to this disruptive technology, receipts, documents and other instruments generated electronically which ought to be denoted were no longer denoted thus leading to loss of Billions of Naira to the Government in revenue. Relying on the provisions of the NIPOST Act Cap N127 LFN 2004 and Stamp Duties Act Cap S8 Laws of the Federation 2004 and the need to increase non-oil revenue generationsfor the Federal Government, NIPOST began to advocate the full implementation of this provisions of the Stamp Duties Act by the general public in all sectors of the economy on both physical and electronic transactions, documents and other instrument – same having been observed as a veritable source of huge revenue for the Federal Government.
In order to ensure that there is no conflict of functions between NIPOST and Federal Inland Revenue Service (FIRS) in relation to the full implementation of the Stamp Duties Act, NIPOST Management approached the Management of the FIRS in the year 2013 to dialogue on the role of NIPOST in ensuring that the Federal Government revenue is protected. Both Management at the meeting agreed that what NIPOST is doing do not infringe with the duties the FIRS was performing. As a result of this, it was jointly agreed that the two agencies should work together to ensure that the disruptive technology do not make Federal Government to loose such huge revenue that ought to accrue to it through NIPOST (please find attached as annexure “A” a copy of the resolution for ease of reference). In recognition of the efforts of NIPOST to ensure that this revenue is earned, protected and made to conform with the economic realities of our time, the provisions of the Federal Government Financial Regulations (revised to January, 2009) in paragraph 620 (b) empowered NIPOST to provide stamp to denote the documents listed in the Regulation (please find attached as annexure “B” a copy of the portion of the Financial Regulation empowering NIPOST). To further ensure that this veritable revenue which had been abandoned without been collected for a long time is tapped, the office of the Accountant General of the Federation vide its circulars reference TRY/A4 &B4/2006 of 20/07/06 recognised this collection by NIPOST and by circular reference TRY/A12 & B12/2015 of 29/12/15further strengthened the power of NIPOST to collect the revenue and extended it to both physical and electronic transactions and in all the sectors of the Nigerian economy (please find attached as annexures “C” and “D” copies of the circulars of 2006 and 2015 respectively).
9. Your Excellency may wish to be informed further that due to the disruptive technology, electronic transactions are not provided for in the extant Act and thus collection of stamp fees in respect of such transactions met with stiff opposition which made NIPOST to desire an amendment of the extant legislation/Act to enable NIPOST ensure that this veritable source of huge revenue for the Federal Government is not lost. The desire for the amendment of the extant regulation therefore is two pronged: -
a. For the Act to recognize electronic transactions and stamp fees to be collected on such transactions.
b. To amend the provision of the extant Act with regards to the threshold of transactions to be denoted and the value of stamp to be used to denote same with a view to bringing it in line with current economic realities and ensure that there is no constraint on the cashless and financial inclusion policies of Federal Government.
10. Twice the proposed bill to amend the provisions of the Stamp Duties Act forwarded to your Excellency through the National Assembly were not assented to but not on the basis that NIPOST is not the appropriate collecting agency (please find as annexures “E” and “F” copies of the 2018 and 2019 Stamp duties Amendment Bill not assented to).
11. It is pertinent to state that because of the huge revenue potential in this stream of revenue, the office of the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), Office of the Accountant General of the Federation (OAGF) as well as the Nigerian Postal Service (NIPOST) agreed that this revenue head should be regarded as a Federation Account revenue payable directly to the Federation account for the three tiers of Government to share with NIPOST being entitled to only the cost of collection at the percentage earlier proposed by the Office of the Revenue Mobilisation Allocation and Fiscal Commission.
12. Prior to the steps taken by NIPOST to ensure that this revenue source is tapped, no other agency of the Government was collecting this stream of revenue but information has it that after NIPOST’seffort was about yielding the desired result, the Federal Inland Revenue Service (FIRS) became interested in the collection.We are aware that the Federal Inland Revenue Service had earlier in 2013 advised RMAFC that this type of stamp duties revenue being pursued by NIPOST were nuisance taxes that should be abolished and even advised the then Honourable Minister of Finance and Coordinating Minister of the Economy to that effect. We wonder therefore, why such nuisance taxes has now become attractive to them for collection. It is important to state that the Federal Inland Revenue Service and State Board of Internal Revenue Services thought erroneously that NIPOST was veering into tax collection which is within their statutory responsibility; NIPOST’s position clearly stated that it was not collecting and will never attempt to collect ad valoremstamp duties tax but merely selling its stamp for the purpose of denoting receipts, documents and other instruments as provided for by the Act to validate and authenticate such transactions. Thus, NIPOST earns proceeds/revenue from the sale of its stamps in its physical and electronic forms. It is important to note that NIPOST hassince developed electronic stamp solution to be deployed to all sectors of the economy as soon as the law is passed.
13. Your Excellency, you may wish to note that due to the misgivings/misunderstanding between the two agencies, His Excellency, the Vice President, constituted an inter-agency committee consisting of the following stakeholders/agencies: -
1. Federal Ministry of Finance (FMF)
2. Office of the Accountant General of the Federation (OAGF)
3. Revenue Mobilisation Allocation and Fiscal Commission (RMAFC)
4. Central Bank of Nigeria (CBN)
5. Nigerian Postal Service (NIPOST)
6. Federal Inland Revenue Service (FIRS)
7. Joint Tax Board (JTB)
8. Office of the Attorney General of the Federation (AGF)
9. State House
10. Nigerian Inter-Bank Settlement system (NIBSS)
14. The outcome of the stakeholders meeting was a draft regulation that provided for NIPOST role to collect the N50.00 on electronic transactions in all sectors of the economy(please find attached as annexure “G” a copy of the draft regulations). The draft Regulation was forwarded by the incumbent Honourable Minister of Finance to Mr. President for his signatureto empower NIPOST to discharge this responsibility (please find attached as annexure “H” a copy of the Honourable Minister of Finance’s letter).
15. It is important to state here that there are huge revenue potentials in the stamp fees collection if it is carefully implemented as sought by NIPOST. From the research carried out by NIPOST, it is believed that considering the value of denotable transactions in all the sectors of the economy, it is expected that the Government will earn a minimum of N500Billion in the first year of implementation of the regulation. And this has the capacity to increase to over a trillion naira per annum in subsequent years.
16. Your Excellency may wish to be informed that the Finance Bill before the National Assembly has a provision amending the Stamp Duties Act Cap S8 LFN 2004 in line with NIPOST request and as contained in the draft regulations earlier agreed by all the stakeholders. We are therefore surprised to discovered that there had been overt move by the office of the Honourable Minister of Finance to divert the collection which is the responsibility of NIPOST to another agency of the Government – Federal Inland Revenue Service at the detriment of the detriment of NIPOST and overall National Development.
17. Your Excellency is hereby invited to
a. Note: -
i. That denoting receipts, documents and other instruments with adhesive postage stamp predates the establishment of the Federal Inland Revenue Service (FIRS).
ii. That the FIRS have never at any time since its creation collected this stream of revenue for the Government.
iii. That diverting this stream of revenue to the FIRS will amount to outright closure of NIPOST who had championed the implementation of the Act to ensure that no Government revenue is lost in the more than ten (10) years.
iv. That this stream of income is a huge and veritable source of non-oil revenue to the Federal Government of Nigeria and will assist this administration to carry out its laudable economic policy programme for the citizenry.
v. That the revenue generated by NIPOST from this stream of revenue will go into the Federation account for the three tiers of Government and NIPOST to be entitled to only the cost of collection which had earlier been proposed to the Government by Revenue Mobilisation Allocation and Fiscal Commission.
b. Consider and reverse any attempt to divertthis revenue source from NIPOST to any other Government agency.
18. Your Excellency while we count on your urgent consideration on this matter, please accept the assurances of our highest respect and warm regards.
COMRADE MOHAMMED YUNUSA COMRADE (DR) AYO OLORUNFEMI
PRESIDENT-GENERAL GENERAL SECRETARY
Cc: The Vice President,
Federal Republic of Nigeria.
Cc: The Chief of Staff to the President,
Aso Villa, Abuja.
Cc: The Deputy Chief of Staff,
Aso Villa, Abuja.
Cc: Secretary to the Government of the Federation,
Cc: Head of Service of the Federation,
Federal Secretariat, Abuja.
Cc: Hon. Attorney General of the Federal and Minister of Justice,
Maitama, Abuja.
Cc: Hon. Minister of Finance and Economic Planning
Central Business District, Abuja.
Cc: Hon Minister of Communications and Digital Economy,
Federal Secretariat, Abuja.
Cc: The Chairman, NIPOST Governing Board,
NIPOST Garki II, Abuja.
Cc: Accountant General of the Federation
Cc: Auditor General of the Federation
Cc: Inspector General of Police
Cc: Director General, State Security Services
Cc: The Chairman,
Revenue Mobilisation Allocation and Fiscal Commission
Cc: The Chairman,
Federal inland Revenue Service.
Cc: The Postmaster-General of the Federation/CEO,
NIPOST GARKI II, Abuja.
Cc: The Chairman,
ICPC.
Cc: The Chairman,
EFCC.
Above is for your information and necessary action, please.
COMRADE MOHAMMED YUNUSA COMRADE (DR) AYO OLORUNFEMI
PRESIDENT-GENERAL GENERAL SECRETARY
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