The Federal Inland Revenue
Service (FIRS) says landlords do not have any reason to increase rents or lease
agreements because they are not the collection agents.
Muhammad Nami, the FIRS executive
chairman, told Nigeria Info in Abuja on Tuesday that tenants would be the ones
to remit the applicable stamp duty at any commercial bank of their choice, not
to any landlord.
“The stamp duty is charged at
graduated rates. Stamp duty on rent or lease from one year to less than seven
years is 0.78 percent. If your rent is N100,000 stamp duty due on it is N780.
Your stamp duty could be as low as N200 or N300 if you live in a room and
parlour or in the village where rent is low,” a statement by Abdullahi Ismaila
Ahmad, director of FIRS communications and liaison department, quoted Nami to
have said.
“If you can afford to pay your
rent between seven to 21 years, your stamp duty is three percent on the rent.
If you can afford to pay rent at once from 21 years and above the stamp duty
due is six percent, which is very rare but we created room for it because some
renters prefer long leases.
“Once you’ve reached an agreement
with your landlord on the amount to pay for your rent of less than seven years,
you should calculate 0.78 percent of the amount, go to a nearby bank and ask to
pay the 0.78 percent into the stamp duty account. Collect the teller and tender
it to your landlord to legalise your transaction with him or her.
“It is the responsibility of the
landlord before he or she issues a receipt or sign a rent or lease agreement
with a tenant to make sure that the tenant presents evidence of stamp duty
payment.
“A landlord that does not insist
on evidence of stamp duty payment will bear the cost of the stamp duty if the
FIRS eventually finds out. You do not pay stamp duty on your own residential
accommodation if you are the owner of the property even if you live in a ten
storey building.”
Nami said the 2019 finance act
has exempted 60 percent of taxpayers, including small and micro enterprises
(SMEs) from paying tax because only companies which make up to N25 million
turnover now pay tax or collect value-added tax (VAT).
“This has therefore relieved
millions of Nigerians and SMEs, including many businesses impacted by COVID-19,
of their tax obligations to the government, which is a form of long-term tax
palliative to them even before the pandemic,” he added.
The FIRS chairman explained that
the COVID-19 pandemic and the resultant economic downturn has made it necessary
for the government to close tax loopholes in order to fund the budget, provide
needed public infrastructure and meet overhead cost like salary payment at
federal, state and local government levels.
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