The Nigeria Tax Act (NTA) 2025 transforms stamp duties from a routine administrative formality into a powerful, transaction-based fiscal instrument that carries serious legal consequences for non-compliance.
Under Section 140(1) of the NTA 2025, stamp duty is a tax imposed on written instruments. The law defines an instrument broadly as any document — whether executed on paper or generated electronically — that creates, transfers, limits, extends, or extinguishes any right, asset, or financial liability. This definition captures a vast range of transactions, from real estate conveyances and corporate leases to electronic bank transfers.
The legislation establishes a strict stamping requirement: no commercial instrument holds legal validity, is admissible as evidence in any Nigerian court, or can be recognised by a public officer unless it has been officially stamped. In the digital age, compliance is achieved either through a physical adhesive stamp or an electronic stamp issued via an automated revenue portal.
Section 140(1) further extends its reach to instruments executed outside Nigeria, provided those documents relate to property situated in the country or any transaction to be performed within its borders.
A practical illustration clarifies how these provisions operate. Consider a land transaction between two individuals, Emeka and Ahmed, where Emeka purchases a plot for ₦20 million. As a "conveyance on sale" of real property, the Ninth Schedule to the NTA 2025 applies an ad valorem duty rate of 1.5 percent. Emeka, as the acquiring party, must pay ₦300,000 in stamp duty to ensure his title deed is legally valid and court-admissible.
Subsequently, Emeka develops the property and leases portions to a tenant named Mathew under varying tenancy terms, each triggering different rates under the Ninth Schedule:
- A short-term lease of less than one year attracts a duty of 0.75 percent of the lease value. - A medium-term lease lasting between one and seven years scales up to 1.5 percent. - A long-term commercial lease exceeding seven years attracts the highest rate of 3 percent of the total lease consideration.
The authority responsible for collecting stamp duties depends entirely on the legal status of the parties involved. Section 140(2)(a) of the NTA 2025 grants the Nigeria Revenue Service (NRS) exclusive jurisdiction over instruments executed by corporate entities or any transaction where a company is a party. The NRS also retains absolute authority over electronic stamp duties deducted from banking institutions.
Conversely, Section 140(2)(b) assigns collection responsibility to the relevant State Internal Revenue Service (SIRS) when an instrument is executed strictly between individuals or non-corporate entities. This means that in the land sale between Emeka and Ahmed, and the subsequent leases to Mathew, the applicable SIRS is the sole authority empowered to collect the stamp duties and stamp the instruments.
To prevent jurisdictional disputes, Section 4 of the Joint Revenue Board of Nigeria (Establishment) Act 2025 designates the Joint Revenue Board (JRB) as the ultimate harmonising body. The JRB ensures seamless coordination and dispute resolution between the NRS and the various state revenue agencies.
