Abstract
The purpose of this research was to develop a computerized process of applying for and paying for stamp duty. This is simply a change in the process of assessing, that is, knowing what you supposed to pay and for what instrument and actually paying for stamp duty. The study critically analyses the manual method of collecting stamp duty in Nigeria and uses ideas so gathered to design a new site (Electronic Stamp Duty Payment System) for use by the Tax Administrators in Federal Inland Revenue Services, Credit Officers in the bank, insurance companies, hire purchase companies, taxpayers/clients e.t.c. from anywhere across the country for payment of stamp duty. The new site allows the Admin to login, create instrument type, verify declared instrument, authenticate a document, generate stamp certificate, view property status of instrument and generate account report. Also, the new site allows the clients to login, create account, declare instrument, make payment, track instrument declaration status, view property status of instrument and apply for duplicate certificate. The system was analyzed and designed using object oriented analysis and design methodology. It was implemented in java using eclipse development environment IDE. Other tools used for the application are unified modeling language tool (UML) for analysis and design, HTML, CSS and mySQL database management system for permanent storage of application data. Innovations in the new system includes: online application for duplicate stamp certificates, certificate authentication facility on the FIRS web portal to allay fear of fake/counterfeit certificates and automatic generation of stamp certificate removing fatigue of physical embossment.
Chapter 1:
Introduction
1.0 Introduction
With the advent of digital technology, postal services all over the country seem to be fading fast into complete irrelevance. What should be done, from a marketing perspective, to stop the Nigerian postal service from going out of business?
To revamp this organization, efforts are to be made to revitalize stamping (N50- stamping) on receipts (in conformity with the Stamp Duty Act 2004, as amended in 2010). This law states that receipts on transaction in Nigeria would not be authenticated without affixing postage stamps on them. With this, legal documents (e.g. lease agreements, deposit agreements, staff employment contracts, staff promotion letters, purchase order agreement and any other agreement covered by law) would not be legal unless the duty stamp was affixed on them.
Stamp duty is a Non-Tax Revenue (NTR) that are imposed by specific Acts of parliament and administered by ministries and other government departments. It is not a tax on transactions rather it is a tax on commercial and legal documents which record and give effects to certain transactions. Stamp duty in a simple term is a levy, charge or duty on a value documents to make them legitimate in the courts of law. A value document is usually one that represents the interest of two or more parties. Stamp duty payable on specified instruments is either ad valorem (at a percentage rate) or fixed. And where the transaction is orally effected or it arises solely from the conduct of the parties no duty will be due since no document will be available for stamping. The Federal Government impose charge or collect duties upon instruments relating to matters between a company and an individual or groups whereas State Governments charge or collect duties of instruments executed between persons or individuals. Although, the rate of duties chargeable has to be agreed with the Federal Government.
Some of the examples of instruments and value documents that attract Stamp Duty include, but are not limited to: agreement or memorandum of agreement, hire purchase agreement, solemn declaration, affidavit, mortgaged deed, debenture, lease agreement, letter of credit, promissory note, divorce deed etc. Again not all documents are chargeable with duty. Instruments that are exempted include cheques, documents relating to the transfer of stock and shares, bank documents regarding savings and transfer between associated companies etc.
Today, most of the transactions are conducted electronically which has greatly hampered collection of stamp duty using adhesive paper stamps on such transaction since they are not in physical form. Therefore, to effectively monitor these transactions, an electronic means has to be deployed.
However, the previous system of physical embossing was unfriendly and characterized by constant movement. There were long queues, congestions and delay of service delivery. Besides, the embossing machine used to make impressions on the instruments was used by other Government departments, and pressing of the appropriate stamp on the instruments was done at one place-the ministry of finance, planning and Economics Development. The process was manual with assessments done by Federal Inland Revenue Services thereby not facilitating clients to understand the assessment process and basis of assessment. A client had to pay the fees in only one bank and had to return the next day.
Another challenge was difficulties in storage and retrieval of stamp records, the old process was prone to paper and process – related fraudulent practices, the procedure was cumbersome and had challenges like unsecure and unreliable collection mechanism and poor service delivery as staff was overwhelmed by the manual work. This puts a number of clients at a risk of holding instruments that are not duly stamped.
This work is therefore, aimed at solving problems pertinent to this situation. Specifically, to develop a computerized process of applying for and paying for stamp duty. This is simply a change in the process of assessing, that is, knowing what you are supposed to pay and for what documentation (instrument) and actually paying stamp duty. The new system will provides for amendment like in instances when a wrong document was chosen during declaration on the portal. It will also streamlines processes and improve voluntary compliance. Captures data into a secure database, which allows client’s data to be easily assed anytime. And enable users to perform transactions in the comfort of their homes, offices or any place with internet connectivity.
1.1 Statement of Problem
Noticeable problems in stamp duty collection include:
1. Stamp counterfeiting.
2. Poor revenue generation.
3. Inadequate education on tax matter.
4. Leakages of revenue accruing to the government from the sale of stamps
1.2 Objectives of the Study
To develop a system that should be able to:
1. eliminate stamp counterfeit.
2. reduce costs of compliance and improve tax compliance.
3. enable easy detection of defaulters as necessitated by inefficient manual systems
1.3 Significance of the Study
The study if implemented in real life would be of immense benefit to the Nigerian Governments, FIRS, taxpayers, policy makers, researchers and academicians in the following ways:
1 Checking of fraud: The stamp certificate is auto generated through a secure process in e- Stamp that assigns a certificate barcode which is registered in our database. This means that if someone produces a fake/counterfeit certificate, it will not be in our database and cannot be validated in our system.
2 The system reduces administrative workload and increase staff productivity:
The stamp certificate is electronically generated removing fatigue of physical embossment. This in effect means no more embossing of instruments with stamps.
3 Online application for duplicate stamp certificates: In case the small stamp could be creased or destroyed as in the old case of physical embossment, the system will allow you get a duplicate certificate if the need arises.
4 It improves the economy of the implementing organization and the country: Increased stamp revenue to the Governments since more people will want to have their instruments issued stamp certificates as a result of gained knowledge and more simplified process.
5 It saves time: Reduced contact hours in FIRS office thus freeing taxpayers to use their time on other value adding engagement.
6 Stamp duty payments can now be made in FIRS partner bank of the client choice.
This material content is developed to serve as a GUIDE for students to conduct academic research
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