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Stamp duty: CBN objects Kasmal International Services’ suit against disbursement of ‘trillions’ in commercial banks

The Central Bank of Nigeria (CBN) has filed a preliminary objection against a legal action instituted by Kasmal International Services which sought a court order barring it from disbursing all accrued deposits paid into the CBN NIPOST stamp duty collection account by all commercial banks.

Counsel for the CBN and the Attorney-General of the Federation, Chief Adeniyi Akintola SAN, told the Federal High Court Abuja that the purported appointment of the Plaintiff by the Nigerian Postal Service (NIPOST) was void at the onset on the ground that stamp duties charges on bank transfers and deposit is a tax that is exclusively administered by the Federal Government through the Federal Inland Revenue Services (FIRS).

Naijaonpoint previously reported that the court in Abuja had three weeks ago, declined restraining the CBN as requested the plaintiff’s lawyer, Dr Alex Izinyon SAN, in a motion ex-parte in the suit marked FHC/ABJ/CS/335/2024.

Justice Inyang Ekwo rather adjourned the matter and directed  Kasmal International Services to serve the processes on the defendants so they could show cause why its request against CBN should not be granted.

The applicant’s lawyer, Dr Alex Izinyon SAN submitted that his client was appointed by the Nigerian Postal Service to represent NIPOST in the collection of 50 naira on all receipts given by any bank or financial institution in acknowledgement of services rendered in respect of electronic transfers and teller deposits from N1,000 and above in compliance with the Stamp Duties Act and the Nigeria Financial Regulations 2009.

He added that the terms of the agreement between NIPOST and the plaintiff included the remuneration of N7.50 from every 50-naira deduction.

In his motion seen by Naijaonpoint, the lawyer stated that his client’s percentage has not been fully paid as agreed.

He argued that if disbursement is done to the exclusion of the plaintiff’s percentage, the plaintiff will be highly prejudiced and will suffer irreparable losses.

In the alternative, the applicant also prayed for an “order of this Honourable Court directing the Defendants/Respondents to appear before this Honourable Court to show cause why the reliefs sought ought not to be granted.”

In their preliminary objection dated dated March 21,2024 and seen by Naijaonpoint on Monday, their counsel Akintola told the court that the agency contract the Plaintiff allegedly had with NIPOST is illegal, adding that only the Federal, State and Local Governments are entitled to sharing the revenue in the federation account.

He contended that NIPOST is not the revenue collection agency on stamp duties hence has no authority to appoint the Plaintiff to represent as collection agent for the Federal Government.

More so, he stated that NIPOST lack the powers to appoint the plaintiff as a revenue generating collector with respect to stamp duty hence the legitimacy of the underlying contract is faulty.

He referred the court to a subsisting judgement which did not bind CBN to any contract deals between NIPOST and the plaintiff.

He also urged the court to dismiss the case while faulting the plaintiff for not joining NIPOST as a defendant in the matter.

The lawyer urged the court to hold that It is the responsibility of the Accountant General of the Federation  to disburse, distribute, allocate or transfer all such accrued revenues in the Federation Account.

He stated,

He stated,

Naijaonpoint reports that April 16 has been fixed by the court as the next adjourned date for hearing.

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