June 9, 2020
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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