Reactions trail FIRS directive to landlords and property agents to charge tenants 6% stamp duty

Nigerians on Twitter are this Thursday discussing the latest announcement by the Federal Internal Revenue Service (FIRS), directing landlords and property agents to charge six percent stamp duty on all tenancy as well as lease agreements and remit same to the service “so that they do not run foul of the Stamp Duty Act.”

The new directive spells out that the payment “lies on the beneficiary of the tenancy or lease agreement, whom the Stamp Duty Act identified as the tenant or renter,” while the party making the payment shall have the obligation to account for the applicable stamp duties.

What is the Stamp Duty Act?

Stamp Duties payment is enabled by the Stamp Duties Act (SDA) 1939, as amended by numerous Acts and various resolutions contained in the Laws of the Federation of Nigeria. It also provides a list of documents in its schedule and the duty payable on each. In line with this, the Finance Act 2019 empowers the Federal Inland Revenue Service (FIRS) as the only competent authority to impose, charge and collect duties upon instruments specified in the Schedule to this SDA if such instrument relates to matters executed between a company and an individual, group or body of individuals.

“The total Stamp Duty collection for 2019 was N18 billion.”

 

For many, the current state of the economy does not favour such charges especially with the pandemic that has taken a toll on businesses; leading to job losses and pay cuts across different sectors. Other questions raised by Nigerians in the conversation currently trending on social media are the issues of double taxation considering the deduction of Personal Income taxes and the recent increase of Value Added Taxes (VAT) from 5% to 7.5% which took effect on 1st Feburary 2020.

This announcement has equally brought to the fore, the issue of accountability and good governance with many bemoaning the huge waste and mismanagement of public resources that goes on in the Ministries, Department and Agencies (MDAs), judging especially from the ongoing probe of the Niger Delta Development Commission (NDDC) which appears to be one of the recently discovered cesspool of corruption in the country, with some even calling for a probe of the Federal Inland Revenue Service (FIRS) as well as the Nigerian National Petroleum Corporation (NNPC).

The consensus within the trend is the belief among majority of Nigerians that if corruption is checked within the MDAs and waste in government is curtailed, more resources will be available for development rather than put a huge burden on the citizenry in both taxes and debt repayment.

See the reactions below:

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