June 9, 2020
KMO LEGAL NEWSLETTER – JUNE 2020 (Vol. 2)
FINANCE ACT AND THE NEW STAMP DUTY PAYMENT REGULATION DURING COVID-19 PANDEMIC
by Felix Ayem (Associate)
Conceptualizing Stamp Duty
Stamp duty is a tax that is levied on documents. Historically, this included the majority of legal documents such as cheques, receipts, military commissions, marriage licenses and land transactions. A physical stamp (a revenue stamp) had to be attached to or impressed upon the document to denote that stamp duty had been paid before the document was legally effective.
Previously, under the Stamp Duties Act, the word “stamp” was defined to mean a stamp impressed by means of a die as an adhesive stamp for denoting any duty or fee. Similarly, the Act states that the word “Stamped”with reference to instruments and materials, applies as well to instruments and materials impressed with stamps by means of a die as to instruments and materials having adhesive stamps affixed thereto.
Going by the above definitions, the Stamp Duties Act clearly excluded electronically generated instruments, materials, receipts or money electronically generated and other transactions duly completed electronically between corporate bodies or between corporate bodies and individuals. This was a serious defect and a loophole in that Act as there was no legal basis to charge duties on such electronic documents.
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June 1, 2020
KMO LEGAL NEWSLETTER – JUNE 2020 (Vol. 1)
THE NEED FOR BUSINESS INTERRUPTION INSURANCE COVERAGE IN NIGERIA IN THE FACE OF THE RECENT COVID-19 PANDEMIC
BY Chibueze Muobuikwu (Senior Associate)
INTRODUCTION:
The outbreak of corona virus (COVID-19) pandemic has no doubt, occasioned an unprecedented human and economic crisis across the globe. The resultant lockdown and abrupt shutdown of major economic activities in the world has apparently given rise to several business disruptions and economic losses across nations including Nigeria.1 According to Kristalina Georgieva, Managing Director of International Monetary Fund (IMF), the economic effect of the pandemic would result in “a recession at least as bad as during the Global Financial Crisis or worse”, and this is because the world is currently experiencing the most difficult economic situation since World War-II.2
The consequence of the foregoing crisis is that many organizations would be seeking for ways to ameliorate the effect of the pandemic on their businesses. One of the options open to some businesses is to have recourse to their insurance policies, and the most significant insurance coverage which business owners would resort to is the business interruption insurance coverage. This write up briefly examines the concept of business interruption coverage; the extent to which such insurance claims may be potent for the insured business owners in the face of the recent pandemic, and the need to broaden the Nigerian insurance legal framework to include business interruption insurance.
BUSINESS INTERRUPTION INSURANCE COVERAGE:
Business interruption insurance has been defined by Black’s Law Dictionary as an agreement to protect against one or more kinds of loss from the interruption of an ongoing business, such as loss of profits while the business is shut down to repair fire damage.
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