• Allays tenants’ fears over rent increment

BY COBHAM NSA, ABUJA – Landlord and property owners that collude with tenants to evade the reinforced stamp duty payment are in for a rough time with the Federal Inland Revenue Service (FIRS).

Also, the Service has declared that there is no basis for any rent increment in relations to the stamp duty payable on tenancy and lease agreement by tenants in the country.

Allaying fears and negative public perception that continue to trail stamp duty payment on tenancy and lease agreements, the FIRS said; “It is the responsibility of the landlord before he or she issues a receipt or sign a rent or lease agreement with a tenant to make sure that the tenant presents evidence of stamp duty payment.

“A landlord that does not insist on evidence of stamp duty payment will bear the cost of the stamp duty if the FIRS eventually finds out. You do not pay stamp duty on your own residential accommodation if you are the owner of the property even if you live in a 10-ten storey.”

On the issue of likely rent hike currently dominating public discourse, the Service maintained that: “There is no basis for rent increment in relation to the stamp duty payable on tenancy and lease agreement by tenants in the country, the Federal Inland Revenue Service (FIRS) has insisted.

“In fact, tenants, not landlords, should pay the applicable stamp duty by themselves at any commercial bank of their choice, not to any landlord.”

Executive Chairman of FIRS, Mr. Mohammad Mamman Nami, who made the clarification in Abuja as part of his ongoing national public enlightenment campaign on the Stamp Duty Act, said there is no cause for alarm among tenants as no landlord or property owner has any cogent reason to increase rent in the present circumstance.

“Since the responsibility of stamp duty payment is not that of the Landlord, there is no justifiable reasons for any landlord to increase rent purportedly on account of the stamp duty which is chargeable on the instrument of the transaction, that is, the tenancy or lease agreement or receipt exchanged between the landlords and the tenant, and not the actual rent fee the landlord is collecting from tenants .

According to him, “The stamp duty is charged at graduated rates. Stamp duty on rent or lease from 1 year to less than 7 years is 0.78%. If your rent is N100,000 stamp duty due on it is N780. Your stamp duty could be as low as N200 or N300 if you live in a room and parlor or in the village where rent is low. If you can afford to pay your rent between 7 to 21 years, your stamp duty is 3% on the rent. If you can afford to pay rent at once from 21 years and above the stamp duty due is 6%, which is very rare but we created room for it because some renters prefer long leases.”

“Once you’ve reached an agreement with your landlord on the amount to pay for your rent of less than 7 years, you should calculate 0.78% of the amount, go to a nearby bank and ask to pay the 0.78% into the stamp duty account. Collect the teller and tender it to your landlord to legalise your transaction with him or her.

Mr Nami, who charged Nigerians to pay their taxes as and when due, also said the Finance Act 2019 has exempted 60% of taxpayers, including Small and Micro Enterprises (SMEs) from paying tax as only companies which make up to N25 million turnover now pay tax or collect Value Added Tax (VAT).

“This has therefore relieved millions of Nigerians and SMES, including many businesses impacted by COVID-19, of their tax obligations to the government, which is a form of long-term tax palliative to them even before the pandemic,” he said.

The FIRS boss said with the global economic downturn due to the coronavirus (COVID-19) pandemic, it has become imperative for the three tiers of government to close tax loopholes in the country.

He said such collaborative efforts in this new normal era would provide needed avenues for governments at all levels to generate resources towards funding their annual budgets; providing needed public infrastructure; and meeting overhead cost such as monthly salary payments to workers.

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