FIRS mulls palliatives on tenancy tax

The Federal Inland Revenue Service, FIRS, is working hard to minimise the impact of taxation on the poor and vulnerable.

Specifically, the Executive Chairman of FIRS, Mr. Muhammad Nami said the service is working on a stamp duty palliative package for tenants to mitigate the impact of COVID-19.

Nami, who appeared on a television programme Monday, hinted that stamp duty will not be collected in arrears from tenants.

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.”

He noted that “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 percent 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.”

Nami also stated 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 FIRS is aware that many taxable Nigerians and businesses are going through difficulties imposed on all 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 local and global economy.”

Nami stressed that stamp duty was not a creation of President Muhammadu Buhari’s administration 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.

“The Joint Tax Board, JTB, where states are represented considered 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.

“Again, for the purpose of clarity, the six percent 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 seven and 21 years, the stamp duty rate is three percent. And if you pay your rent monthly or yearly, that is less than seven years; your stamp duty rate is 0.78 percent.

“The 0.78 percent 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 percent, which is marginal. Of course those who live in Maitama who pay N10 million as rent will pay more at the same 0.78 percent because their rent is higher than those in other parts of Abuja,” he explained.

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