The Executive Chairman, Federal Inland Revenue Service (FIRS), Mr.
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 and further 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.
“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.”
Mr. 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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