Federal Inland Revenue Service (FIRS) has directed landlords and property agents to charge six per cent stamp duty on all tenancy and lease agreements.
In a statement, FIRS said the burden of payment of the six per cent lies on the beneficiary of the tenancy or lease agreement, whom the Stamp Duty Act identified as the tenant or renter.
FIRS gave the directive in a statement on Wednesday by Director, Communications and Liaison Department Abdullahi Ahmad.
The landlords and property agents, according to Ahmad, are to remit such collections to FIRS “so that they do not run foul of the Stamp Duty Act.”
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 Finance Act 2019 states that;
The Federal Inland Revenue Service shall be the only competent authority to impose, charge and collect duties upon instruments specified in the Schedule to this Act if such instrument relates to matters executed between a company and an individual, group or body of individuals.
Ahmad stated;
Property-related transactions like tenancy or lease agreement fall under the Ad Valorem category of the stamp duty which attracts six per cent duty payable in percentage of the total value or sum of the tenancy or lease.
He stressed that the burden of payment of the six per cent “lies on the beneficiary of the tenancy or lease agreement, whom the Stamp Duty Act identified as the tenant or renter.”
Ahmad stated that the responsibility of collection and remittance fall on the landlord or agent in charge of the property for lease or rent.
Many Nigerians on social media have however decried the move, saying it is an avenue to cause more hardship for tenants.
See some reactions below;
Because i want to rent house now, i would pay 6% of that to government again.
So that FIRS people would be spending 3 billion naira per day just like their counterpart in the NDDC.
This is as a result of 2015 error where we voted in a demonic govt of evil and hardship.
— Tosin Olugbenga (@TosinOlugbenga) July 23, 2020
We’re still battling electricity tariff increment, high forex, stamp duty charges on every credit alert, vat increment, stamp duty on properties,ground rent etc.
Now,FIRS has introduced 6% stamp duty on tenancy, to be paid with ur rent to ur landlord who in turn remits to them— Dr. (@theDamorela) July 23, 2020
FIRS to begin implementation of 6% Stamp Duty on rent which is to be paid by tenants. It means that as a new tenant in Lag for example, u will pay the following before moving into the house:
1. Rent
2. Agency fee 10% of rent
3. Legal/Agreeemnt 10% of rent
4. Stamp duty 6% of rent— Senior Man (@KingEsene) July 23, 2020
Let me break it down for us. So if u are moving into an apartment and ur rent is 300k yearly, you will pay the following as total package:
1. Rent- 300k
2. Agency 10% of rent- 30k
3. Legal 10% of rent- 30k
4. Stamp duty 6% of rent- 18k
Total= 378k.
Some agents demand more % o.— Senior Man (@KingEsene) July 23, 2020
This 6% stamp duty on rents no matter how you look at it, makes no sense.
Landlords will of course increase rents but not remit it.
An avenue created for property owners and agents to extort.
No formal database of housing… How will FIRS track?
— Wale Adetona (@iSlimfit) July 23, 2020
The #Firs is not even accountable on tenement rates.. So many fault taxing..
This 6% would not even be favourable for an average Nigerian.. All will lead to high rent rates and besides withholding taxes are even ignored.— Kizzy (@Kingsleyaaron3) July 23, 2020
Why can’t you tell us to move out of Nigeria (FIRS)
I pay tax already, I enjoy nothing in this country.
No Hospital
No Electricity
No Education
No Road
No security
No peace of mind
How did we get here in this country@nassnigeria
Why will an angecy add to suffering of the masses— Alao mutiu (@mutiu_tayo) July 23, 2020
This FIRS tax won’t affect village people ba?
We go leave Town for una!— Olofu (@sheiduhabib_) July 23, 2020
We go pay stamp duty to receive money, still pay stamp duty to leave for house. We go soon pay stamp duty for having girlfriend
— DANNY 👑🎠 (@Danny_Walterr) July 23, 2020
6% stamp duty tax from people that are struggling to pay house rent? What have we gained or enjoyed from this regime sef?
— Benjamin Nwosu. (@BenjaminNwosu7) July 23, 2020
