Home Business N50 Stamp Duty: Consumer protection commission lauds central bank

N50 Stamp Duty: Consumer protection commission lauds central bank

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The Federal Competition and Consumer Protection Commission (FCCPC) on Tuesday commended the Central Bank of Nigeria over its resolve to stop the payment of N50 stamp duty to merchants by consumers.

The commission, in a statement, said it will collaborate with CBN, relevant regulators and law enforcement authorities to enforce the law.

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It also implored consumers to report violations of the law when they occur with evidence of such violations.

Newsmen reported how the CBN urged merchants who operate Point of Sale (POS) machines for cashless transaction to stop the collection of N50 charges from their customers.

The CBN made the clarification amidst confusion generated by merchants and other businesses operating POS machines to charge their customers an additional N50 on every transaction.

The CBN Director of Payment System Management, Musa Jimoh, made this known on Monday while speaking on Channels Television’s Business Morning programme.

Mr Jimoh said the bank issued a circular and merchants misinterpreted the directive, thus making customers pay additional fee for goods and services.

“Nobody should pay extra on goods and services,/ the CBN official added, noting that the N50 stamp duty is a fee regulated by an act that directs merchants to pay all necessary taxes as regulated by government agencies.

In recent time, eateries, supermarkets, malls and other businesses across the country have had to charge their customers an additional N50 on every POS transaction. The businesses said they are complying with the CBN directive on cashless transaction.

Experts have expressed worry over the new development, saying it could slow down Nigeria’s drive to deepen financial inclusion and encourage a cashless economy.

On Tuesday, the CPC noted that it has robustly engaged the CBN on the issue, pursuant to relevant sections of the Federal Competition and Consumer Protection Act (FCCPA), including meetings of the highest levels of leadership of both regulators.

“The FCCPC’s strongly held position was that an assessment imposed on merchants necessarily is a component of their cost of doing business, and may only be directly passed on to consumer in limited circumstances,” the statement said.

“For many reasons, including and particularly the CBN’s effort to promote a cashless economy, the merchants’ response of imposing this assessment on consumers was not only inconsistent with the underlying policy, but also counterproductive and burdensome on consumers.

“Businesses, by their very nature, already capture the operating cost price of their goods and services. To impose an additional fee on consumers that is exclusive of price and discriminates based on the selected mode of payment essentially amounts to a penalty for the adopted mode of payment. The problems associated with carrying excessive cash in order to avoid a penalty are myriad and multifaceted.”

The commission noted that it welcomes the CBN’s definitive statement that the directive did not intend to pass such fees to consumers, adding that “this makes it inappropriate and illegal for businesses to pass a stamp duty cost of doing their business to consumers”.

“Effectively, and in furtherance of this clarification, merchants are now prohibited from penalising or otherwise assessing any duty, costs or assessment characterised as “stamp duty” on consumers who select point of sale options to conclude their purchases or transactions,” it said.

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