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FIRS: Stamp duty will apply to new agreements NOT rent renewal

FIRS: Stamp duty will apply to new agreements NOT rent renewal

The Federal Inland Revenue Service (FIRS) says the stamp duty charge on rents and leases would only apply to new agreements and not renewals.

In a statement on Monday by Abdullahi Ismaila Ahmad, director of FIRS communications and liaison department, quoted Femi Oluwaniyi, coordinating director of the tax operations group at FIRS, as saying: “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.”

Muhammad Nami, the FIRS executive chairman, who appeared on ‘Your View’, a breakfast show on TV Continental, also said the service is planning stamp duty palliative package for Nigerians.

Nami said stamp duty was not newly introduced by the Muhammadu Buhari-led administration explaining that the tax dates as far back as 1939.

As part of the palliative being put together, the tax chief hinted that stamp duty will not be collected in arrears from tenants.

“There is never a time when taxation is convenient for everybody to pay,” he said, encouraging Nigerians to see tax payment “as a patriotic duty to our dear country, Nigeria”.

“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 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.”

Nami also assured that stamp duty will not lead to an increase in rent as tenants are expected to remit the stamp duty on their rent to the nearest bank or FIRS office.

“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 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.”

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