HOW NIGERIA IS KILLING HER OWN AGENCY: A case of NIPOST, FIRS and NASS

HOW NIGERIA IS KILLING HER OWN AGENCY: A case of NIPOST, FIRS and NASS

The raging imbroglio between the Nigerian Postal Service, NIPOST, and the Federal Inland Revenue Service, FIRS, on the issue of stamp duty is quite alarming. It is a typical example of how a government can sacrifice one of its own agencies to build another.  The position of the National Assembly who supposes to be an arbiter in a situation like this, to say the least, is ambiguous. The narrative here is simple and could be unfolded in five scenarios.

The first scenario started in year 2016 when NIPOST and her technical partners created a device that make payment of stamp duty on electronic transactions possible.

This perhaps is NIPOST response to the prevailing Information, Communication Technology, ICT, regime that has seen people migrating from analogue to digital in an internet age. It is also in line with the statutory responsibility of NIPOST to collect stamp duty on behalf of the Federal Government. This statutory responsibility, as entrenched in Nigeria Postal Service Act, has been amended many times since 1939 without removing it from NIPOST.

Somewhere along the line, there was a disagreement between NIPOST and her partners and one party went to court. That was after billions of Naira has been accrued for Government on the project.

The Federal Government intervened by placing an embargo on the amount realized so far, pending the outcome of the case.

On realizing the huge revenue potentials of this initiative, created by NIPOST, several interests began to emerge. According to a statement credited to the secretary to the Federal Government; the potential revenue is second to oil revenue. This may have attracted interest groups, who were hitherto docile on issue of stamp duty until NIPOST invented the e–payment version.

The second scenario commenced with the sudden appearance of FIRS on the scene. The supervisory ministry of FIRS is the Federal Ministry of Finance. The FIRS suddenly realized that it has a responsibility to collect Stamp Duty on behalf of the Federal Government.

NIPOST protested about this development and accused FIRS of attempting to steal her mandate. The FIRS did not respond immediately.

Then came the third scenario; In October 2019 ,an Executive Bill titled; ‘’The Nigerian Tax and Fiscal Law amendment Bill 2019 was presented to the National Assembly with the 2020 Appropriation Bill. The Bill which sought amendment to some Tax laws was code named the 2019 Financial Bill.

Item number 6 on the proposed bill sought an amendment to Stamp Duty Act to include an electronic version which was created by NIPOST and her partners.

In the proposed bill; the power to implement the e-payment version was transferred to FIRS, who did not either create or initiate the original concept. This miracle was made possible by removing NIPOST name from some aspect of Stamp Duty Act and replaced it with FIRS. NIPOST continued to protest and accused the FIRS of reaping where they did not sow. Surprisingly, the Federal Ministry of Communication, who supervises NIPOST was quiet.

Many questions are begging for answers. The first is the moral question.

Is it right for a government agency to create a concept that will boost government revenue and for the same government to take away the implementation to another agency, who neither create or contribute to the invention of such concept, under the guise of 2019 Financial bill?. Is this in conformity with the law of utility patents?.

Does it mean that if the Nigerian Customs Service or the Nigerian Immigration Service introduces an application that would yield trillions of naira to Federal Government tomorrow,  a financial bill can be introduced to enable FIRS assume the responsibilities of collecting custom duty or give them the Right to issue  international passport?.

If there are issues between NIPOST and her partners why can’t the government mediate and settle the matter in such a way that will benefit all, if only to compensate those who invested their brains and resources to create such initiative; after all, government is the greatest beneficiary of the invention.

What value has FIRS add to Stamp Duty over the years?. Until NIPOST introduced the concept of e-payment for Stamp Duty, we have never heard FIRS talking about it.

Meanwhile, the bill was sent to the National Assembly which set the stage for the fourth scenario. The bill which received accelerated hearing at the National Assembly was passed and sent for presidential assent .It has since received presidential approval.

It is curious to note that NIPOST’s name did not feature among the 16 critical stake holders that made presentations and submitted memorandum on the bill at the public hearing held on November 19, 2019.

One thought that our highly respected law makers should have requested for NIPOST input and critically examined the multiplier effects of such issues that have something to do with existing NIPOST Act without creating any contradictions. However, the stage is set for the fifth scenario.

Having acquired the support to implement the e-version of payment for stamp duty, created by NIPOST, the FIRS realized that it does not have the mandate to implement the second phase of the project which involves physical documents. The instrument to implement this phase is postage stamp which domiciles in NIPOST Act.

This instrument has been in use by successive Postal Administrations in Nigeria for over one and half centuries.

This instrument is not available to FIRS because it is not statutorily empowered to issue postage stamps. To cover up this loophole, the FIRS started printing adhesive stamps which it intends to use as evidence of payment for stamp duty on physical documents. This is a philatelic function of NIPOST.

In one of its several press releases on stamp duty titled: ‘Clarification on Administration of Stamp Duty in Nigeria’, the FIRS stated that: “Postage stamp is administered by NIPOST for the purpose of delivery of items and documents, it does not denote duty and therefore not a substitute for FIRS adhesive stamps which is produced for sole purpose of stamp duty payment’’.

This statement is not true. It is a monumental display of ignorance about functions and uses of postage stamps. This is also the reason for this article. Before the general public is misled, it is important to state here that postage stamp is not a mere adhesive stamp but a potent instrument recognized by law for payment of stamp duty. The use of adhesive postage stamps as evidence of payment for stamp duty on documents of contractual value is valid.  It is in line with best practice and International standard.

The expression: ‘INSTRUMENT’’ includes any postal article within the meaning of the Postal Service Act of sovereign nations. In case of Nigeria, this instrument is within the meaning of the Nigeria Postal Service Act since 1939.

This Act was amended several times and the function has never been taken away from NIPOST.

For the benefit of the reading public, the postage stamp is not just a mere adhesive stamp. It is a national and international identity element recognized by law and the Universal Postal Union, UPU, convention. The UPU, established in 1874, is now a plenipotentiary of 192 member countries and an Arm of the United Nations .

Every new set of postage stamp issued by each sovereign nation of the world has a place in the UPU Archive. These stamps are allocated a World Numbering System, WNS, identity numbers; to prevent faking, abuse and illegal use anywhere in the world. This makes postage stamp the most reliable instrument recognized by law for stamp duty purposes.

It is for the same reason that a competent court of legal jurisprudence will accept adhesive postage stamp as an instrument and evidence of payment for stamp duty purposes on any physical document that involves contractual agreement.

According to the UPU Act; the postage stamp shall be issued solely by a competent issuing authority in conformity with the Act of the UPU. The issuance of stamp shall also include circulation

The competent authority being referred to here are; postal administrations of sovereign countries, the Vatican and the United Nations, who are members of the UPU. Nigeria is a signatory and respected member of the UPU since July 10, 1961.

Within the meaning of the UPU Act and convention; postage stamps perform three major functions; the definitive function, the commemorative/special functions and the fiscal/revenue functions.

The definitive function of postage stamp entails; the use of postage stamp  as evidence of payment for postal transactions such as; letter mail, parcel etc.

By its commemorative/special functions; postage stamp is a state symbol, used to document important events in the life of every nation as well as their values. Postage stamp celebrates the present and preserves the past for the future and posterity.

This is the reason why philatelic classes are offered in some countries and postage stamps are used to teach history and national values. Postage stamp is a great object of historical, educational and cultural values. It is also a means of preservation of heritage, legacies and historical landmarks. Moreover, postage stamp has a secondary value. This is why a N5k (Five kobo) Postage stamp of 1974, for example, could be sold for over N25, 000 at secondary philatelic market.

The Fiscal/Revenue functions of postage stamp include; the use of postage stamps as a receipt with specific monetary value for payment of Duty and collection of Revenue for governments. It is a quasi-currency recognized by law and international community with a history of over 180 years.

In the area known as Nigeria today, adhesive postage stamps have been playing this role since 1874. Look for any document of contractual value, agreement or receipt of valuable properties, you will find a relevant postage stamp on it, even if such document is over a hundred years old.

It is mandatory  by law for physical documents that involve contractual agreement such as; bank notes, bill of exchange, promissory notes, receipts of payment for valuable items, policies of insurance, mortgages, notarial acts, share warrants among others to be stamped with adhesive postage stamps  and cross signed as evidence of payment for stamp duty.

As a retired General Manager of the Nigerian Philatelic Service, I have been summoned to appear before many courts of competent legal jurisprudence, on behalf of NIPOST, to give evidence on the credibility and status of postage stamps used on disputed documents.  Postage stamps have technical details which cannot be decoded by a novice and a non philatelist.

NIPOST philatelic staff are trained to have the forensic knowledge of the anatomy of postage stamps.

It is, therefore, laughable to see an uninformed mind relegating or equating the integrity and utility value of postage stamp with a mere adhesive stamp which has no history and cannot be counted among national and international identity elements.

Many people wrongly believe that postage stamp is no more in use because the world is migrating from analogue to digital and electronics system. This is not true. Several millions of postage stamps are being issued every month by postal administrations across the world to meet the needs of their countries. It is a fallacy to insinuate that Postage stamps are issued only for posting letters.

According to the UPU statistics; ‘’as far back as 2004, the designated operator’s philatelic revenue was 2.5 billion USD. The secondary market occupied by traders, stamp dealers and collectors was estimated to worth as much as $13.8 billion. Now it is much more than that.

Today, postage stamp and philatelic market worth about $100 billion, most of which are not captured in official statistics.

The reasons  for this is due to online activities and e-commerce market which has open up  the market, granted accelerated growth and easy access to international philatelic community.

Secondly, many postal administrations worldwide are diversifying their focus from issuing postage stamps for letter mail to other areas such as Fiscal, Revenue collecting stamps and Philately. In some countries the postal service often issue special stamps for payment of duties on luxurious items

In the 2019 summer edition of the UPU  International Journal (Union Postale ), it was written in an article titled ‘’The new face of philately’’ that; “Today, stamps are so much more than means of paying for postal service; they have become the focus of global market of many stake holders”. The stake holders being referred to here include; operators of financial services and users of postage stamps for revenue purposes.

At a period when many countries are strengthening the capacity and utility value of their postage stamps to earn more revenue, Nigeria is trying to devalue the usage of its own stamps just to create legitimacy for unknown adhesive stamps which has no history in law. This leads us to another set of questions;

If Nigeria already have postage stamp which have been in use for many years, recognized by law and accepted by national and international community as instrument for payment of stamp duty, why is FIRS re-inventing the wheel, duplicating efforts and spending money awarding contract to print  another adhesive stamps for Nigeria ?.

These FIRS adhesive stamps which they are now teaching Nigerians how to use serve the same purpose with postage stamps which Nigerians are already familiar with and could be obtained at the nearest postal agency of  a remote village.

Who has the greatest capacity, proximity and accessibility to implement stamp duty?

Is it not NIPOST with over 12,000 staff, including licensed postage stamp vendors who supplies stamps to corporate users of postage stamps. NIPOST has more than 3,000 postal outlets across the country. Many of these outlets include, postal agencies, post offices and general post offices are rotten away in many villages, towns and cities because government cannot maintain them.

If NIPOST was  able to develop a concept capable of yielding trillions of naira to the Federal Government why can’t the government help NIPOST to build  capacity to manage her invention,  instead of transferring the implementation to another agency ?.

Is NIPOST and FIRS not working for the same government?

Is it not the same government that will turn round and accuse NIPOST of being ineptitude, a drain pipe and a non performing agency, which could lead to retrenchment of staff at the end of the day?

How will NIPOST perform when government is taking away her vital instrument of work, including her invention to another agency of same Government  to implement under the cover of a Financial bill ? The questions are endless.

It is necessary for government to empower NIPOST and allow her to perform optimally so that part of her revenue could be used by government to revive NIPOST rotten post-offices, enhance its Logistics and Financial services to compete with its peers across the world?

After all, the Deutshche Post (German Postal Service) is a majority shareholder in DHL, while the United Parcel Service (UPS) employs over 400,000 staff across the world. The difference is the level of investment and capacity building a country is ready to invest in her Postal Service.

In conclusion it is very important that well-meaning people appeal to the Federal Government and the National Assembly to revisit the issue of who collects stamp duties in the spirit of Fairness and Justice.

The printing of FIRS adhesive stamp to replace postage stamp as evidence of payment for stamp duty on physical documents is an unnecessary duplication of efforts and wasting of resources. It should be discontinued immediately as it  add no value to stamp duty functions.

Postages stamps should be allowed to continue to play its role as an instrument recognized by law for payment of stamp duty, a role it has been playing for over a century and now. This role is recognized as best practice and international standard which Nigeria should maintain.