BY COBHAM NSA, ABUJA – Following public misconceptions over the recent unveiling Federal Inland Revenue Service (FIRS) Adhesive Stamp Duty, the Service says tenants’ concerns about likely rent hike by landlords are grossly misplaced.
Aside allaying tenants’ fears that the stamp duty will not lead to rent increase by Landlords, the FIRS is set to offer mouth watering palliatives to cushion any adverse effects on the nation’s housing sub-sector.
Executive Chairman of FIRS, Mr Muhammad Nami, who assured tenants across the country of soothing interventions, said the Service is already working on a stamp duty palliative package to address the current economic realities caused by coronavirus (COVID-19).
Nami explained that: “Stamp duty should not make any landlord to 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.
Speaking on live TV Continental (TVC) popular morning show, “Your View”, via video link, the Executive Chairman said part of the palliatives is that stamp duty will not be collected in arrears from tenants.
A statement by Director, Communications and Liaison Department, FIRS, Abdullahi Ismaila Ahmad quoted the Executive Chairman as telling his interviewers that the FIRS is aware many taxable Nigerians and businesses in the country are currently going through difficulties due to the COVID-19 pandemic.
He said in recognition of the existing economic challenges, the FIRS has consistently rolled out tax-related palliatives to relieve Nigerians and businesses of their tax liabilities since the pandemic shut down the Nigerian and global economy.
Nami, who urged Nigerians to embrace tax payment “as a patriotic duty to our dear country, Nigeria”, said; “there is never a time when taxation is convenient for everybody to pay.”
The FIRS boss said contrary to some false 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.”
According to him; “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 purpose of clarity, the 6% stamp duty rate is not chargeable across 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 3%.
“And if you pay your rent monthly or yearly, that is less than 7 years, your stamp duty rate is 0.78%. The 0.78% is the rate for most tenants like you and I who live in Suleja or Minna. If your rent is N100,000 like you said, you only pay 0.78%, 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.”
“As a tenant, calculate 0.78% 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”, he said
The Coordinating Director, Tax Operations Group of FIRS, Mr Femi Oluwaniyi, had at the weekend further explained 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 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”, he said.