National
Outrage As FG Moves To Mop Stamp Duties On Rent
By Ayodele Oluwafemi
Nigerians have kicked against the new directive of the Federal Inland Revenue Service, FIRS, that tenants would be charged six percent Stamp Duty on all tenancy and lease agreements.
The six percent Stamp Duty to be paid by tenants is expected to be remitted by landlords to the tax agency.
The new directive was contained, in a statement, on Wednesday, by Director, Communications and Liaison Department Abdullahi Ahmad.
“The responsibility of collection and remittance fall on the landlord or agent in charge of the property for lease or rent. The party making the payment shall have the obligation to account for the applicable stamp duties,” part of the statement read.
Charges for other Stamp Duty include, Appraisement or Valuation of Property , 0.5 per cent; Certificate of Occupancy and Partnership, N1,000 flat rate; Gift of Land, 1.5 per cent and Legal Mortgage, 0.375 per cent.
Others are Legal Mortgage (Upstamping), 0.375 per cent; Deed of Conveyance or Transfer on Sale of Property, 1.5 per cent; Memorandum of Understanding (Related to Land, Sales, Joint Venture, Surrender, Subdivision Agreements, 1.5 per cent; Power of Attorney (Irrevocable/Land Related), 1.5 per cent and Sales Agreement, 1.5 per cent.
Stamp Duties payment is enabled by the Stamp Duties Act (SDA) 1939, as amended by numerous Acts and various resolutions contained in the Laws of the Federation of Nigeria. The SDA also provides a list of documents in its schedule and the duty payable on each.
The implication of this new directive on tenant can be simply explained thus;
For instance: if a landlord decides to rent out an apartment for N100,000 per annum, with the 6 percent Stamp Duty on tenancy and lease agreement, the tenant will have to pay additional N6,000. Hence, with other charges like maintenance and agent fees, tenants will have to pay more for rent and lease.
The new FIRS’ directive has not gone down well with many Nigerians, who taken to the microblogging platform, Twitter to reject the new development.
With the increase in the Value Added Tax, VAT, to 7.5 percent, some Twitter users accussed the Federal Government of placing high burden of tax on citizens.
The decision to implement the new stamp duties at the time Nigerians are being burdened by the economic fallout of the COVID-19 pandemic when other countries were lessening burdens has not gone down well with many Nigerians.
GWG gathered the following tweets:
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