Nigeria to extend stamp duties collection to food, drugs, events

Barely a week of announcing the enforcement of its stamp duties law on financial transactions across commercial banks, Nigeria may be on the road to extend the enforcement of same law to retailers of drugs, food and other commodities in the commercial hub of Lagos.
In a notice on Monday, an agent of the government announced that stamp duties will now be collected from fast food joints, event center and drug stores in the commercial hub of the Africa's biggest economy.
"Please be informed that we have been appointed as an agent to NIPOST - state owned postal agency- to implement section 89 of the stamp duties Act and federal government financial regulations 2009,"  a solicitor firm Whitewood solicitors said.
The firm listed lotteries betting, Pharmaceutical companies and event centers and restaurants and its coverage area.
Last week, the central bank in a circular to commercial lenders in which it told them to immediately start charging 50 naira ($0.2513) on deposits of 1,000 naira and above, or for electronic transfers conducted by customers.
It said that payments or transfers in the same name, in the same bank or to an associated bank, would not be liable to stamp duties payment, while "any form of withdrawals/transfers from savings accounts" were also exempted.
The stamp duties law was enacted in 2009 but not previously enforced because of complaints of excessive charges by commercial lenders on customers' accounts.Last Friday, Nigeria's Vice President Yemi Osinbajo said the government is considering changes to the tax regime as part of efforts to overcome the crisis in Africa's biggest economy brought on by falling oil prices.
"We are looking at increasing our tax coverage," Osinbajo, who is attending the World Economic Forum in Davos, Switzerland, told CNBC in a television interview.
"VAT, for instance -- we have been doing just about 20 percent coverage. We think that just by increasing coverage we could do much more and so we could earn more in terms of local resources," he said.
Increasing value-added tax from 5 percent, among the world's lowest VAT rates, and broadening the tax base were among suggestions put forward by International Monetary Fund head Christine Lagarde during a visit to Nigeria this month.
The sharp drop in crude revenues, which provide 95 percent of foreign earnings, has led to the naira hitting record lows on the parallel market as foreign exchange reserves dwindle. Nigeria is Africa's top oil producer.
Crude prices have fallen in the last few days to their lowest levels since 2003, at just over $27 a barrel, although they staged a rebound on Friday. The 2016 budget assumes an oil price of $38 per barrel.
Finance Minister Kemi Adeosun has said Nigeria plans to borrow up to $5 billion from multiple sources, including the Eurobond market, to plug its budget deficit and Osinbajo said changes to taxation were also being considered.