The Federal Inland Revenue Service (FIRS) on Saturday made clarifications on categories of stamp duties to be paid by tenants across the country.
The Director of Tax Policy, FIRS, Mr. Mathew Gbonjubola, said at webinar conference in Abuja that six percent stamp duty is for tenancy above 21 years.
He added that tenancy or lease agreement of between seven to 21 years attracts three percent stamp duty and below one percent for less than seven years.
The agency had on Wednesday mandated landlords and property agents to charge six percent stamp duty on all tenancy and lease agreements across the country.
The decision had generated outcries among Nigerians on social media.
The Coordinating Director, Tax Operations unit of FIRS, who also spoke on the matter, said the stamp duty applies to new agreements and not to renewals.
He said: “If a new agreement is drawn up at renewal, that document should be stamped just like initial agreement. If, however, the renewal terms are already in the initial agreement such that no new document is prepared but just payment of the rent for renewal, then no stamping is required.”
Also a tax expert with the PriceWaterhouseCoopers, Taiwo Oyedele, said on his Twitter handle that stamp duty on most rent agreements was fixed at 0.78 percent and not six percent as being widely reported.
He wrote: “Based on the Stamp Duties Act, stamp duty on lease or rent agreement is payable as follows: If the lease term is less than seven years, stamp duty rate is 0.78 percent (e.g. N780 on N100k rent). For a term of seven+ to 21 years, stamp duty rate is 3 percent (means N3k for N100k rent). For a term above 21 years, stamp duty rate is six percent (e.g. N6k for N100k rent)
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