FIRS asks banks to charge stamp duty on mortgage-backed loans

The Federal Inland Revenue Service (FIRS) has asked banks to deduct a 0.375 percent stamp duty charge on all mortgage-backed loans and bonds.

Mortgage-backed loans are loans banks extend to individuals or entities to buy a home and repay the loan amount over time with interest.

Stamp duty is a levy charged on physical and electronic instruments or documents.

In an email sent by Access Bank to customers on Thursday, the new directive which took immediate effect, does not affect old loans with already agreed terms and conditions. 

“We would like to inform you that the Federal Inland Revenue Service (FIRS) has directed all Nigerian banks to implement stamp duty on certain transactions that require duty payments such as contracts and legal mortgages,” Access Bank said.

“In compliance with this directive, we have taken measures to streamline the process to make transactions more convenient for you.

“To this end, a stamp duty charge of 0.375% will be applied to loans backed by legal mortgage, shares, debentures, or bonds. The charge will be applied on the value of the legal mortgage, shares, debentures or Bonds and remitted to the Federal Inland Revenue Services.

“However, all previously approved loans will remain unchanged and should be repaid in full as per the agreed terms and conditions.

“We are committed to providing you with exceptional service.”

The development follows FIRS’ effort to increase federal government revenue through taxes.

On January 6, the revenue service asked banks to commence the deduction of the sum of N50 as electronic money transfer levy (ETML) from foreign currency (FCY) transactions.