Nigeria’s Federal Inland Revenue Service has cleared the air on the stamp duty to be paid on rents and leases, saying it is not six percent across board, as was reported earlier this week.
In a series of tweets late Saturday, the tax agency explained that
Stamp Duties rate on Rent/Lease is graduated depending on the number of years in the Agreement.
It said that rate for agreements from 1-7 years is 0.78%; above 7 years to 21 is 3%; above 21 years is 6%.
“Note that FIRS DID NOT/ DOES NOT INCREASE tax rate,” it tweeted on its twitter handle, @firsNigeria.
According to the Schedule to Stamp Duties Act, the part on Lease states that for every N50 and also every fractional part of N50 of the rent of the year: if the term is definite and doesn’t exceed 7 years–39Kobo or 0.78%; exceeds 7 years and doesn’t exceed 21 years–N1.50Kobo or 3%; above 21 years– N3.00 (or 6%).
“We make this clarification following enquiries by taxpayers and to clarify that Stamp Duties rate on Rent/Lease is graduated according to the years in Agreement. We appreciate the public for their support and enjoin all taxpayers to continue to comply with their tax obligations,” the agency said.
FIRS said it will continue to work in collaboration with our stakeholders to make taxation the pivot of national development.
There was an uproar in the country this week when some reports said the FIRS had mandated landlords in Nigeria to collect from their tenants six percent of their rents and remit to the tax authorities.
