Twenty four hours after the Federal Inland Revenue Service warned against evading payment of Stamp Duty, the agency on Wednesday called on all landlords and property agents to ensure that they charge six per cent as Stamp Duty on all tenancy and lease agreements.
The FIRS specifically said that any tenancy or lease agreement that is entered into with all renters must attract the six per cent duty which must be remitted promptly to the Service.
It said the remittance was vital so that landlords and property agents do not run foul of the Stamp Duty Act.
The Executive Chairman, FIRS, Mr. Muhammad Nami said in a statement on Wednesday that property-related transactions like tenancy or lease agreement fall under the Ad Valorem category of the Stamp Duty which attracts six per cent duty payable in percentage of the total value or sum of the tenancy or lease.
The statement which was signed by the Director, Communications and Liaison Department, FIRS, Abdullahi Ismaila Ahmad, explained that the burden of payment of the six per cent lies on the beneficiary of the tenancy or lease agreement.
It said based on the fact that the Stamp Duty Act identifies the tenant or renter as those that would bear the burden of payment, the responsibility of collection and remittance fall on the landlord or agent in charge of the property for lease or rent.
The statement quoted Nami to have said that the party making the payment would have the obligation to account for the applicable stamp duties.
The statement listed other Stamp Duty types and their rates to include Appraisement or Valuation of Property, 1.5 per cent; Certificate of Occupancy, Partnership N1,000 flat rate; Gift of Land, 1.5 per cent; Legal Mortgage, 0.375 per cent; Legal Mortgage (Upstamping), 0.375 per cent; and Deed of Conveyance or Transfer on Sale of Property, 1.5 per cent.
There is also a 1.5 per cent Stamp Duty imposed on Gift of Land; Memorandum of Understanding (Related to Land, Sales, Joint Venture, Surrender, Subdivision Agreements, 1.5 per cent; Power of Attorney (Irrevocable/Land Related), 1.5 per cent; and Sales Agreement, 1.5 per cent.
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, Promissory notes, Insurance policies and others stipulated in the Schedule to the Stamp Duties Act.
It is also chargeable on both physical and electronic instruments through 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.