Stamp Duties under the Nigeria Tax Act 2025: A Modern Framework for Legal and Fiscal Compliance. The Nigeria Tax Act 2025 (NTA 2025) represents a historic consolidation and modernization of Nigeria’s tax laws. Among its key innovations is the reform of the stamp duty regime, captured in Sections 124–127 under Chapter Five – Duties on Instruments.
These provisions redefine how stamp duties are imposed, collected, and enforced, merging traditional compliance processes with digital technology. This article provides a comprehensive analysis of these sections, exploring their legal foundation, compliance implications, and practical relevance for businesses and practitioners.
Legal Framework and Purpose
Sections 124–127 of the NTA 2025 establish the statutory basis for the imposition, payment, and enforceability of stamp duties. The reform consolidates the old Stamp Duties Act into a modern framework that supports automation, traceability, and efficiency in revenue administration.
Its core purpose is to ensure that every instrument executed in Nigeria, or executed abroad but relating to Nigerian property or transactions, is appropriately charged with stamp duty. This closes long-standing revenue loopholes and reinforces Nigeria’s fiscal sovereignty.
Imposition of Duties on Instruments (Section 124)
Scope and Application
Section 124 imposes duties on instruments at the rates specified in the Eighth Schedule of the NTA 2025, while allowing for certain exemptions listed in Part III of Chapter Nine. The provision applies to:
Instruments executed in Nigeria, such as leases, contracts, conveyances, and share transfers; and
Instruments executed outside Nigeria that are connected to Nigerian property, business, or matters.
Illustrations
Local Execution: A company in Lagos executes a lease agreement for its new office. The agreement qualifies as an instrument executed in Nigeria and attracts stamp duty at the applicable rate.
Foreign Execution: A UK lender signs a loan agreement in London to finance a Nigerian project. Although executed abroad, the document relates to Nigerian business and is therefore chargeable under Section 124(b).
Significance
This provision eliminates gaps that previously allowed offshore transactions to avoid duty. It aligns the system with modern fiscal principles, ensuring that all instruments with a Nigerian nexus are captured for tax purposes.
Payment and Denotation of Duties (Section 125)
Section 125 introduces flexibility and modernization in how stamp duties are paid and evidenced. The law now recognizes both physical and electronic means of denoting duty, including adhesive stamps, die imprints, digital tagging, electronic receipts, and payment certificates.
The Joint Revenue Board (JRB), working with the Nigerian Postal Service (NIPOST), is empowered to issue regulations in the Official Gazette to authorize additional methods, reflecting Nigeria’s shift toward e-governance and digital compliance.
Illustrations
Digital Payment: A fintech lender executes an online loan agreement with a Nigerian borrower. The borrower may pay electronically, and the payment is confirmed through a digital tag or e-receipt.
Traditional Mode: A law firm handling a share transfer may still affix a physical stamp before filing with the Corporate Affairs Commission (CAC).
Hybrid Mode: The JRB may introduce a QR-code system that verifies payment directly via the Nigerian Revenue Service (NRS) portal, enabling instant validation of stamp duty compliance.
Practical Implication
This flexibility enhances compliance, simplifies verification, and integrates stamp duties into Nigeria’s digital revenue ecosystem.
Time Limit and Responsibility for Payment (Section 126)
Section 126 outlines both the deadline for payment and who bears responsibility.
All chargeable instruments must be stamped within 30 days of execution. Non-compliance within this timeframe attracts penalties and may result in inadmissibility under Section 127.
Responsibility for payment lies primarily with the beneficiary of the transaction. This includes:
The transferee acquiring property rights;
The service recipient paying for a service; or
The person providing security in a financial transaction.
Illustrations
Property Sale: The buyer in a Deed of Assignment must pay the duty within 30 days. Failure to do so makes the deed unenforceable until rectified.
Loan Security: A borrower executing a Debenture Deed must ensure the instrument is duly stamped within the statutory period.
Consultancy Service: A Nigerian company hiring a foreign consultant must pay duty locally even if the consultant executed the contract outside Nigeria.
Impact
By defining the responsible party, this section eliminates ambiguity and promotes accountability. It ensures that duty is paid promptly by the party receiving the economic benefit.
Consequences of Non-Stamping (Section 127)
Section 127 provides the legal effect of failing to comply with stamp duty requirements.
An unstamped or insufficiently stamped instrument is not admissible as evidence in civil, judicial, or arbitration proceedings, and cannot be relied upon to enforce any legal right or obligation.
However, the law makes an important exception: such an instrument may still be admissible in criminal proceedings where it serves as evidence of fraud, forgery, or related offences.
Illustrations
Civil Case: A business partnership deed that was never stamped cannot be used in court to claim profits or enforce contractual rights until the appropriate duty and penalties are paid.
Criminal Case: The same unstamped document may, however, be tendered in a criminal trial as evidence of conspiracy or fraudulent conduct.
Legal Effect
This reinforces the long-standing legal doctrine that stamp duty is a prerequisite to enforceability. Compliance is not merely procedural—it determines the legal validity of instruments in civil transactions.
Policy, Compliance, and Administrative Insights
Sections 124–127 reflect Nigeria’s deliberate move toward a digitally enabled fiscal environment. The scope of stamp duties now extends beyond traditional paper-based transactions to include electronically executed instruments and cross-border agreements with a Nigerian nexus.
By introducing electronic tagging, digital receipts, and online verification, the law enhances transparency and simplifies compliance for both taxpayers and administrators.
Equally, assigning the responsibility for payment to the beneficiary promotes fairness and aligns the system with international practice. The 30-day payment window provides certainty, while the evidentiary restriction for unstamped documents strengthens enforcement and deters evasion.
Collectively, these measures elevate the stamp duty regime into a model of modern fiscal governance, integrating technology, accountability, and legal precision.
Practical Takeaways for Businesses and Professionals
Stamp all instruments within 30 days of execution to ensure legal validity.
Adopt e-stamping and online verification for convenience and compliance.
Maintain digital or printed proof of payment (e-receipts, certificates, or tags).
Audit cross-border contracts to confirm that any document relating to Nigerian property or transactions is duly stamped.
Educate clients and staff that unstamped instruments cannot be enforced in civil or arbitral proceedings.
Conclusion
Sections 124–127 of the Nigeria Tax Act 2025 usher in a new era of transparency and modernization in Nigeria’s stamp duty administration. By extending coverage to digital and cross-border instruments, introducing e-stamping technology, and embedding strict compliance rules, the NTA 2025 positions Nigeria for a digitally driven revenue future.
This reform not only enhances tax collection efficiency but also strengthens the legal and institutional integrity of transactions across sectors. The framework ensures that every instrument—whether physical or electronic—contributes meaningfully to Nigeria’s sustainable fiscal growth.
Olatunji Abdulrazaq CNA, ACTI, ACIArb(UK)
Founder/CEO, Taxmobile.Online
