MOSES OBA
The Federal Inland Revenue Service (FIRS) has clarified the categories of stamp duties to be paid by tenants.
The FIRS on Wednesday mandated landlords and property agents to charge 6 percent Stamp Duty on all tenancy and lease agreements.
This decision has generated a strong debate among Nigerians on social media.
However on Saturday, Director, Tax Policy of the FIRS, Mr. Mathew Gbonjubola during a webinar conference put clarity to the rates.
Mr. Gbonjubola explained that “the 6% stamp duty is for tenancy above 21 years while 7 to 21 years lease or tenancy attracts 3% and less than 7-year tenancy is below 1%.”
Mr. Femi Oluwaniyi, Coordinating Director, Tax Operations Group of the FIRS told The Nation that stamp duty on rent or lease only applies to new agreements and not to renewals.
According to him, “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.”
During the virtual conference, the panellists said that “Nigerians should accept the fact that the country can no longer rely solely on revenue accruing from its natural resources to fund the budget, hence the need to embrace taxation as the new normal of national fiscal policy.”