Document Reveals Non-Deduction and Non-Remittance of ₦34.7 Million Stamp Duty by Standards Organisation of Nigeria

Secrets Reporters

Despite being saddled with the responsibility of maintaining ‘standard’ and ensuring that stiff penalties and sanctions are issued to erring bodies and individuals, the Standards Organisation of Nigeria has been caught in the web of corruption. 

Documents in our disposal chronicles how SON, the body given powers to designate, establish and approve standards in respect of metrology, materials, commodities, structures and processes for the certification of products in commerce and industry throughout Nigeria, is embroiled at the centre of over thirty-four million Naira corruption saga. 

An audit of the financial activities of the Standards Organisation of Nigeria (SON), Abuja, for the period January to December 2020, has revealed significant non-compliance with statutory regulations, resulting in the non-deduction and non-remittance of ₦34,734,052.68 in stamp duty.

According to data buried in the audit, the agency failed to deduct and remit the mandatory 1% Stamp Duty totaling ₦34,734,052.68 on contract agreements executed in 2020.

Remarkably, the audit revealed that no justification was provided for the brazen omission, which violates established financial regulations.

Regulatory Violations

The audit findings contravene several provisions of government regulations, including:

Treasury Circular Ref. No. TRY A1 & B1/2017 OAGF/CAD/026/V.111/.182 dated April 20, 2017, which mandates Ministries, Departments, and Agencies (MDAs) to deduct 1% stamp duty on contract agreements and remit it to the Federal Inland Revenue Service (FIRS).

Paragraph 234(i) of the Financial Regulations (FR), 2009, which requires Accounting Officers to ensure full compliance with the deduction and remittance of Value Added Tax (VAT) and Withholding Tax (WHT) on supply and service contracts.

Paragraph 235 of the Financial Regulations (FR), 2009, which mandates the remittance of WHT, VAT, and PAYE to the FIRS simultaneously with payments to contractors or suppliers.

Risks Highlighted

The report flagged two major risks arising from the irregularities. They are loss of revenue to the government, undermining efforts to generate public funds, and overpayments to contractors, leading to inefficiencies in financial management.

SON’s Response 

According to the auditor general, the management of SON did not provide any response or explanation to the audit queries, raising concerns about accountability and oversight within the agency.

It was stated that the observed lapses highlight weaknesses in the agency’s internal control systems and the need for strict compliance with financial regulations. 

SON was established by the SON Act No. 14, 2015, which repeals the Standards Organisation of Nigeria Act, Cap 59 laws of Federal Republic of Nigeria, 2004, and Enacts the Standards Organisation of Nigeria Act. 2015 for the purpose of providing additional functions for the organisation, increasing penalties for violations, and for related matters.