Banking & Finance

FG Directs Banks to Deduct Stamp Duty Charges on Mortgages

The Federal Government has directed Deposit Money Banks to immediately begin the deduction of 0.375 per cent stamp duty charge on all mortgaged-backed loans and bonds.

Mortgage-backed loans are loans extended by financial institutions to individuals or entities to buy a home and repay the loan amount over time with interest while bonds are debt securities issued by governments, municipalities, corporations, or other entities to raise capital.

The new directive was contained in a message sent to customers by banks as directed by the Federal Inland Revenue Service. It indicates that the government is expanding the scope of stamp duty charges to include foreign transactions and loans, alongside regular bank transfers, as part of efforts by the tax authority to enhance fiscal performance.

Recall that banks were also in January directed to deduct stamp duty on old foreign transactions between January 2021 and December 2023 by January 31, 2024. Before that, the electronic money transfer levy was only applicable to accounts receiving electronic deposits of N10,000 and above or its equivalent.

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