What Is Stamp Duty? How Does It work?

Stamp Duty in Nigeria: What It Is, How It Operates & Essential Information (2026)

Stamp duty is a significant yet frequently misinterpreted government fee in Nigeria, impacting various daily financial transactions, particularly electronic money transfers. With upcoming changes set to take effect in January 2026, it’s vital to grasp the concept of stamp duty, its implications for you, and how it differs from standard taxes.

‎What Is Stamp Duty?

‎Stamp duty is a governmental charge levied on specific financial transactions and documents to render them legally binding and enforceable. It falls under the purview of the Stamp Duties Act in Nigeria, which outlines the regulations and documents that are subject to this charge.

‎‎Historically, stamp duty has been applied to various written and printed instruments, including:

‎• ‎Agreements and contracts

‎• ‎Receipts and promissory notes

‎• ‎Documentation related to property and loans

‎• ‎Share certificates and insurance policies

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What Stamp Duty Means for Bank Transfers

‎Effective January 1, 2026, a ₦50 stamp duty fee will be imposed on electronic transfers of ₦10,000 or more within Nigerian banks and financial institutions. Formerly known as the Electronic Money Transfer Levy (EMTL), this charge is now officially designated as stamp duty under the revised tax regulations.

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‎ Key Points to Note

‎‎✅ Who Is Responsible: The sender of the money will pay the stamp duty fee.

‎✅ Minimum Amount: This applies only to transfers of ₦10,000 and above.

‎✅ Exemptions: Transfers within the same bank account (owned by one individual) and salary payments may be exempt from this charge.

‎✅ Implication: This adds to the total cost of electronic fund transfers, as the stamp duty is in addition to current transfer fees.

‎ Why This Is Important for Nigerians

‎🇳🇬 For everyday consumers, businesses, and users of fintech services, the reinstatement of stamp duty on digital transactions signifies:

‎• More predictable regulations — The law explicitly dictates how taxation on electronic transfers is handled.

‎• ‎Enhanced compliance — Banks and fintech platforms are expected to adhere to established methods for deduction and remittance.

‎• ‎Increased expenses for fund transfers — Particularly affecting frequent person-to-person or business transactions.

‎‎This change is part of a larger set of reforms associated with the new Nigerian Tax Law of 2026, which seeks to standardize the application of various duties and taxes within the banking industry.

‎ How It Differs from Regular Taxes

‎Stamp duty is distinct from:

‎• ‎Income tax

‎• ‎Value-Added Tax (VAT)

‎• ‎Corporate taxes

‎‎Instead, it represents a specific charge levied on the legal acknowledgment of transactions and documentation. In the context of money transfers, it serves as a minor fee that guarantees transactions are correctly recorded in accordance with Nigerian tax regulations.

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