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Federal Government halts 1% stamp duty deductions by MDAs on payments to contractors

The Federal Government has instructed all Ministries, Departments, and Agencies MDAs to immediately stop deducting one percent stamp duty from payments made to contractors, vendors, suppliers, and service providers. This directive, outlined in a Federal Treasury Circular dated June 15, 2026, and signed by the Accountant-General of the Federation, Shamseldeen Ogunjimi, is based on the provisions of the Nigeria Tax Act 2025. The new tax law clarifies that stamp duty applies to chargeable instruments, not payment transactions, making the previous practice inconsistent with the current legal framework. The Office of the Accountant-General of the Federation emphasized that this measure ensures compliance with the Nigeria Tax Act 2025 and prevents the misapplication of statutory deductions. MDAs are now required to charge, deduct, or remit stamp duty only when explicitly mandated by the Act. Under the new regime, stamp duty will strictly apply to instruments and transactions specifically listed as chargeable. Stamp duties validly deducted before the Nigeria Tax Act 2025 commenced remain preserved. The Act, effective January 1, 2026, now governs stamp duty administration in Nigeria. Contracts awarded before January 1, 2026, will follow the old framework, while those after this date are subject to the new law. The Ninth Schedule of the Nigeria Tax Act 2025 lists instruments still subject to stamp duty, including agreements for real property sales, annuities, assignments, bonds, bills