The Federal Inland Revenue Service (FIRS) says the six percent stamp duty charge on tenancy previously announced will only apply to tenancy and lease agreements that are above 21 years.
Speaking on Saturday at a webinar organised by OTISVIP, Muhammad Nami (pictured), the FIRS executive chairman, said stamp duty charges on tenancy and lease agreements would be graduated.
The webinar was themed ‘Stamp Duty: The New Black Gold?’.
Thus, tenancy and lease agreements less than seven years would carry 0.78 percent stamp duty while agreements between seven and 21 years will carry a three percent charge.
According to a statement by Abdullahi Ismaila Ahmad, director of FIRS communications and liaison department, Nami said Nigerians should accept the fact that the country can no longer rely solely on crude revenue to fund the budget, hence the need to embrace taxation as the new normal of national fiscal policy.
Panellists on the online discussion were Alexander Ezenagu, an assistant professor of taxation at HBKU, Qatar; Damilola Anwo-Ade, managing partner at Sprout Digital; Mohammed Jega, director of VoguePay; Sam Onyemelukwe, managing director of Trace Anglophone West Africa; Japheth Omojuwa, founder of The Alpha Reach; and Mathew Gbonjubola, FIRS director of tax policy.
“While all panellists agreed on the need for taxation to complement government’s revenue flow from natural resources, a lively debate ensued on the timing of the stamp duty campaign and the public debate surrounding the application of tax revenue in the nation-building processes, especially in building public infrastructure,” the statement read.
“The panellists stressed the need for prudent management of tax revenue even as they enjoined Nigerians to embrace the fact that the tax net needs to get wider to accommodate more citizens for holistic national development.”
Gbonjubola said citizens must reassess the notion that Nigeria is rich explaining that “in terms of gross domestic product vis-à-vis our population, Nigeria is not a rich country when compared to a country like Botswana”.
He also stated that that the stamp duty is levied on the instrument of the transaction and not on the payment itself. (The Cable)
The Federal Inland Revenue Service (FIRS) has published detailed information to guide taxpayers and the general public on rates payable as stamp duty.
Mr Abdullahi Ahmad, Director Communications and Liaison Department of the FIRS, made this known in a statement in Abuja on Tuesday.
Ahmed said that the clarification was made following several requests by taxpayers seeking such on the current administration of Stamp Duties Act in the country.
He stated that the clarification guide was contained in a Public Notice signed by Executive Chairman of FIRS, Mr Muhammad Nami and was published on the official FIRS website, www.firs.gov.ng.
He quoted Nami as saying “stamp duty is a tax payable in respect of dutiable instrument as provided under the Stamp Duties Act, CAP S8, LFN 2004 (as amended).
“Such instruments include Agreements, Contracts, Receipts, Memorandum of Understanding (MOU), Promissory notes, Insurance policies and others stipulated in the Schedule to the Stamp Duties Act.
“Stamp Duty is chargeable on both physical and electronic instruments in two ways i.e. Ad-valorem, where duty payable is a percentage of the consideration on an instrument; or Flat Rate, where a fixed sum is chargeable irrespective of the consideration on dutiable instrument or document” he explained.
Nami listed no fewer than 50 types of chargeable transactions which require stamp duty.
He explained that some of the chargeable transactions were bank deposit or transfer, loan agreement, Memorandum of Understanding (MoU) related to land, sales agreement, will, tenancy/lease agreement and all receipts.
Nami clarified that the recently inaugurated FIRS Adhesive Stamp was not the same as postage stamp administered by NIPOST for the purposes of delivery of items and documents.
He said that such was therefore not a substitute for the FIRS adhesive stamp, which was produced for the sole purpose of stamp duty payment.
“The burden of payment of stamp duties whether fixed or ad-valorem is that of the beneficiaries of a contract, or Money Deposit Banks’ customers who transfer an amount of N10,000 and above from his account to another customer’s account.
“It is the responsibility of Ministries, Departments and Agencies (MDAs), Money Deposit Banks (MDBs), Companies, Landlords, Executors, among others to ensure that service providers, contractors and tenants pay stamp duties due on agreements, receipts and other dutiable instruments.
“Failure to deduct or remit stamp duties into the Federal or State Stamp Duties Account attracts relevant penalties and interest as stipulated in the Stamp Duties Act, Cap S8, LFN 2004 (as amended)” Nami stated.