6% stamp duty on tenancy, lease agreements not chargeable across board – FIRS clarifies

FIRS

6% stamp duty on tenancy, lease agreements not chargeable across board – FIRS clarifies

The Federal Inland Revenue Service, FIRS says the 6 per cent stamp duty on all tenancy and lease agreements is not chargeable across board but only on rent or lease agreement of above 21 years.

The clarification is coming days after the FIRS gave the directive to landlords and property agents in a statement by the tax agency’s Director, Communications and Liaison Department Abdullahi Ahmad on Wednesday July 22.

The Executive Chairman, FIRS Mr. Muhammad Nami, disclosed this on Monday during a live appearance on TVC’s Your View programme on Monday.

According to him, “If your rent or lease is between 7 and 21 years, the stamp duty rate is three per cent. 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 like you said, you only pay 0.78 per cent, which is marginal.

“Those who live in Maitama who pay N10 million as rent will pay more at the same 0.78 per cent because their rent is higher than our own in other parts of Abuja.” he said.

He also noted that the FIRS is working on a stamp duty palliative package for tenants in view of the current economic realities occasioned by COVID-19.

Nami hinted that stamp duty would not be collected in arrears from tenants.

According to him, “there is never a time when taxation is convenient for everybody to pay but I enjoin Nigerians to embrace tax payment as a patriotic duty to our dear country, Nigeria”.

Nami stated that the FIRS was aware that many taxable Nigerians and businesses in the country were going through difficulties imposed on all by COVID-19.

FIRS

He said FIRS had consistently rolled out tax-related palliatives to relieve them of their tax liabilities since the pandemic shut down the Nigerian and global economy.

“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″.