You receive ₦15,000 from a friend, but when you check your balance, only ₦14,950 is there. Where did the ₦50 go? The culprit is something called ‘stamp duty’…
The first time I saw ‘stamp duty’ on my bank statement, I was confused. What stamp? I didn’t ask for anything to be stamped.
If you’ve ever wondered what this charge means and why your bank keeps deducting it, let me clear things up for you.
Stamp duty is a government tax, not a bank fee. Your bank is simply collecting it on behalf of the Federal Government of Nigeria.
What is stamp duty?
Stamp duty is a tax on electronic receipts and transfers.
According to the Stamp Duties Act, any transaction of ₦10,000 or above is subject to a ₦50 stamp duty charge.
This means if you receive money into your account and the amount is ₦10,000 or more, your bank will deduct ₦50 as stamp duty.
I learned this the hard way when I received ₦15,000 from a friend and noticed ₦50 was missing from the total.
Who collects stamp duty?
The Federal Inland Revenue Service (FIRS) is responsible for collecting stamp duty in Nigeria.
However, they don’t collect it directly from you. Instead, banks act as collection agents and remit the money to the 
FIRS on your behalf.
So when you see that ₦50 deduction, it’s not your bank keeping the money. They’re just facilitating the collection for the government.
When do you pay stamp duty?
You pay stamp duty when you receive transfers, deposits, or payments of ₦10,000 or above.
Here are common scenarios:
- Bank transfers: If someone sends you ₦10,000 or more, ₦50 will be deducted as stamp duty.
- Cash deposits: If you deposit ₦10,000 or more into your account, you’ll be charged ₦50.
- POS deposits: If you receive money through a POS terminal and it’s ₦10,000 or more, stamp duty applies.
One thing to note: stamp duty is charged per transaction, not cumulatively. So if you receive five separate transfers of ₦10,000 each, you’ll pay ₦50 for each one.
Why does stamp duty exist?
Stamp duty has been around for a long time. It was originally a tax on physical documents like contracts, receipts, and agreements.
In 2020, the Nigerian government updated the law to include electronic receipts and bank transfers.
The goal is to generate revenue for the government, which is then used for public services and infrastructure.
Whether or not you agree with the policy, it’s the law, and all banks are required to enforce it.
Do you pay stamp duty on withdrawals?
No, stamp duty is only charged on money coming into your account, not on withdrawals.
So if you withdraw ₦50,000 from your account, you won’t be charged stamp duty.
This confused me at first, but it makes sense once you understand that stamp duty is a tax on receipts, not on spending.
Can you avoid paying stamp duty?
Legally, no. Stamp duty is a government tax, and trying to avoid it could get you into trouble.
However, there are a few things to keep in mind:
- If you receive amounts below ₦10,000, stamp duty doesn’t apply.
- Some banks charge stamp duty on deposits but not on transfers, or vice versa. Check with your bank to understand their policy.
- If you’re receiving money for business purposes, you can factor stamp duty into your pricing or budgeting.
I’ve learned to just accept stamp duty as part of banking in Nigeria. It’s a small amount, and there’s no way around it.
What happens if your bank charges stamp duty incorrectly?
If you notice a stamp duty charge on a transaction below ₦10,000, or if you’re charged more than ₦50, contact your bank immediately.
Banks occasionally make errors, and they’re usually willing to refund incorrect charges.
I once saw a double stamp duty charge on a single transaction. After calling customer service and explaining the issue, they reversed the extra charge within a few days.
Is stamp duty the same as VAT or other taxes?
No, stamp duty is different from VAT (Value Added Tax).
VAT is a tax on goods and services, while stamp duty is a tax on financial transactions and receipts.
Both are government taxes, but they apply to different things.
How to check stamp duty charges on your account
To see all stamp duty charges on your account, check your bank statement.
Look for entries labeled ‘Stamp Duty’ or ‘Electronic Receipt Levy.’
Most banks also show these charges in their mobile apps, so you can track them in real time.
I make it a habit to review my statement monthly to ensure all charges are correct.
Final thoughts
Stamp duty is a ₦50 government tax on electronic receipts and transfers of ₦10,000 or more.
It’s collected by your bank on behalf of the Federal Inland Revenue Service, and there’s no legal way to avoid it.
While it might seem like another annoying charge, understanding what it is and why it exists can help you manage your finances better.
Just keep an eye on your statements, and if you notice any errors, don’t hesitate to contact your bank.