Prof Abiola Sanni teaches Law of Taxation at the Faculty of Law, University of Lagos. He discusses the decision by the Federal Government to enforce the payment of stamp duty on tenancy agreements ...
Prof Abiola Sanni teaches Law of Taxation at the Faculty of Law, University of Lagos. He discusses the decision by the Federal Government to enforce the payment of stamp duty on tenancy agreements with TOBI AWORINDEFederal Inland Revenue Service has ordered all property owners and their agents to charge six per cent stamp duty on all tenancy and lease agreements they enter into with all leasees and remit promptly to the service.
The implications of the FIRS circular go beyond rent. Agreements/contracts, including sales agreements, joint venture agreements, loan agreements and deeds of gift, are also impacted. The FIRS circular provides that all these will attract duty at ad valorem , contrary to the statutory provisions prescribing a flat rate of 15 kobo for agreements and N3 for deeds of gift .Peoples’ voices on rent have been loud because it touches on a basic right — right to shelter.
Landlords who are benevolent recognise that this is not a good time to increase rents. It is not even practicable where tenants are in arrears. A few countries had to directly intervene by granting “rent amnesty” for the period of lockdown. In a capitalist country like the United States of America, the Congress enacted the Cares Act, signed into law on March 27, 2020, which provides 120 days of eviction relief for tenants in federally backed housing.
Since the circular was printed, I would expect the FIRS to review the content of the extant information circular. Item 13.0 of the circular provides for amendment or revision of the circular. The FIRS may, at any time, withdraw or replace this circular or publish an amended or updated version. In the meantime, an official statement should be made to that effect. Taxpayers and advisors should have a reliable source to cite as authority on the revised position of FIRS on this.All rights reserved.
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