Home BUSINESS BANKING & FINANCE Fed. Inland Revenue Plans Stamp Duty Palliatives For Tenants- Nami

Fed. Inland Revenue Plans Stamp Duty Palliatives For Tenants- Nami

Executive Chairman, Federal Inland Revenue Service (FIRS), Muhammad  Nami, has assured tenants across the country that the Service is working on a stamp duty palliative package for them in view of the current economic realities occasioned by COVID-19.

Mr. Nami dropped this hint on Monday during a live appearance on the popular morning show, “Your View”, on TV Continental (TVC) via video link, according to a statement by Director, Communications and Liaison Department, FIRS, Abdullahi Ismaila Ahmad.

As part of the palliatives, the Executive Chairman hinted that stamp duty will not be collected in arrears from tenants, even as he told his interviewers that “there is never a time when taxation is convenient for everybody to pay” and enjoined Nigerians to embrace tax payment “as a patriotic duty to our dear country, Nigeria.”

The Executive Chairman stated that the FIRS was aware that many taxable Nigerians and businesses in the country were going through difficulties imposed on all of us by COVID-19, hence 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 some false claims in certain quarters, stamp duty was not a creation of the current administration of President Muhammadu Buhari or the current leadership of the FIRS.

He said: “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 andfurther reworked into the Stamp Duty Act 2004.”

He continued: “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.

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“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.”

Nami allayed the fear that stamp duty would lead to rent increase, saying: “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. 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.”

Recall that at the weekend, Coordinating Director, Tax Operations Group, FIRS, Mr. Femi Oluwaniyi, stated 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.”

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