The Federal Inland Revenue Service (FIRS) has assured that stamp duty will not be collected in arrears from tenants. It also said it should not be collected from tenants by landlords.
The Executive Chairman of the service, Muhammad Nami, disclosed this as part of the planned stamp duty palliatives for tenants.
Mr Nami during the disclosure on a morning show “Your view” on TVC said the Service is working towards the stamp duty palliative package in view of the current economic realities occasioned by COVID-19.
According to a statement by the service spokesperson, Abdullahi Ahmad, Mr Nami said there is never a time when taxation is convenient for everybody to pay.
He, however, urged Nigerians to embrace tax payment “as a patriotic duty to our dear country, Nigeria.”
He also said the FIRS was aware that many taxable Nigerians and businesses in the country were going through difficulties imposed on all by COVID-19. He said it was for that reason that the FIRS has consistently rolled out tax-related palliatives to relieve them of their tax liabilities since the pandemic shut down the Nigerian and global economy.
Mr Nami stressed that contrary to claims in certain quarters, stamp duty is not a creation of the current administration of President Muhammadu Buhari or the current leadership of the FIRS.
“Stamp Duty dates back to colonial times in Nigeria. It has been a form of tax in Nigeria as far back as 1939 when you and I were not yet born. It was codified in our laws in 1953, that is before independence. It was consolidated in 2002, published in 2006, and further reworked into the Stamp Duty Act 2004.
“The Joint Tax Board (JTB) where states are represented consider it necessary to bring the stamp duty act to the attention of Nigerians following the recent launch of the Inter-Ministerial Committee on Audit and Recovery of Back Years Stamp Duties where the new FIRS Adhesive Stamp Duty was unveiled. As chairman of the JTB, the FIRS was mandated to enlighten Nigerians on stamp duty. That’s why the FIRS published a clarification notice on the stamp duty and we shall continue to educate the public on it.
“Again, for the purpose of clarity, the 6 per cent stamp duty rate is not chargeable across the board. It is only chargeable on rent or lease agreement of above 21 years. If your rent or lease is between 7 and 21 years, the stamp duty rate is 3percent. And if you pay your rent monthly or yearly, that is less than 7 years, your stamp duty rate is 0.78 per cent. The 0.78 per cent is the rate for most tenants like you and I who live in Suleja or Minna. If your rent is N100,000 as you said, you only pay 0.78 per cent, which is marginal. Of course, those who live in Maitama who pay N10 million as rent will pay more at the same 0.78% because their rent is higher than our own in other parts of Abuja.” he was quoted as saying.
Stamp duty not increase in rent
Mr. Nami allayed the fear that stamp duty would lead to a rent increase.
“Stamp duty should not make any landlord increase his or her rent because it is not paid by the landlord. Landlords are not our collecting agents. It is the responsibility of the tenant to pay stamp duty and you don’t have to give it to your landlord. As a tenant, calculate 0.78 percent of your rent and pay that fraction at the FIRS office nearer to you or at your bank. You should then fix the stamp duty imprimatur on the tenancy agreement before you sign it with your landlord. It is as simple as that.”
Earlier, the Coordinating Director, Tax Operations Group, FIRS, Femi Oluwaniyi, said that “the FIRS stamp duty on rent or lease only applies to new agreements and not to renewals. If a new agreement is drawn up at renewal, that document should be stamped, just like the initial agreement. If, however, the renewal terms are already in the initial agreement such that no new document is prepared but just payment of the rent for renewal, then no stamping is required.”
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