The Federal Government has directed all Ministries, Departments and Agencies to immediately discontinue the deduction of one per cent stamp duty from payments made to contractors, vendors, suppliers and service providers, citing the provisions of the Nigeria Tax Act 2025.
The directive was contained in a Federal Treasury Circular dated June 15, 2026, and signed by the Accountant-General of the Federation, Shamseldeen Ogunjimi.
According to the circular, the new tax law makes it clear that stamp duty is imposed on chargeable instruments rather than on payment transactions, rendering the long-standing practice of deducting one per cent from government payments inconsistent with the current legal framework.
The Office of the Accountant-General of the Federation stated that the directive became necessary to ensure compliance with the Nigeria Tax Act 2025 and prevent the misapplication of statutory deductions.
“In view of the above and in order to ensure strict compliance with the provisions of the Nigeria Tax Act 2025, as well as to prevent the misapplication of statutory deductions, all MDAs are hereby directed to note that the Nigeria Tax Act 2025 provides that stamp duty is imposed on chargeable instruments and not on payment transactions,” the circular stated.
