Following a strong heated debate by Nigerians on social media over the the proposed stamp duties to be paid by tenants, the Federal Inland Revenue service has given clarifications on the categories.
The FIRS had on Wednesday mandated landlords and property agents to charge 6 percent Stamp Duty on all tenancy and lease agreements.
The Director, Tax Policy of the FIRS, Mathew Gbonjubola during a webinar conference 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%.”
Also the spokesperson of the FIRS, Abdullahi Isma’ila, said stamp duty rate on tenancy rent or lease agreement for a period below seven years will attract only 0.78 per cent rate charge.
“Please note that Stamp Duties rate on Rent/Lease is graduated depending on the number of years in the Agreement as follows: 1-7 years is 0.78%; above 7 to 21 years is 3%; above 21 years is 6%,” Isma’ila clarified in a tweet on Saturday.
He also denied that the FIRS increased, or is planning to increase the prevailing tax rates in the country.
On his part, the Coordinating Director, Tax Operations Group of the FIRS, Femi Oluwaniyi, also said 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,” Mr Oluwaniyi said