Investigations on the charge, which was announced by the Federal Inland Revenue Service (FIRS) a few days ago reveal that all the stakeholders rued the move in view of its additional burden on their dwindling incomes and negative implications for the housing sector.
Under the stamp duty charge regime, landlords and property agents are to charge six percent stamp duty on all tenancy and lease agreements they enter into with all renters and remit the same to the service in line with the provisions of the Stamp Duty Act.
The Chairman of FIRS, Mr. Muhammad Nami, made the disclosure following the recent release and wide circulation of a stamp duty clarification guide. According to him, property-related transactions like tenancy or lease agreement fell under the Ad Valorem category of the stamp duty, which attracted six percent duty payable in percentage of the total value or sum of the tenancy or lease.
The stamp duty types and their rates are Appraisement or Valuation of Property, 1.5 percent; Certificate of Occupancy, Partnership N1,000 flat rate; Gift of Land, 1.5 percent; Legal Mortgage, 0.375 percent; Legal Mortgage (Upstamping), 0.375 percent; Deed of Conveyance or Transfer on Sale of Property, 1.5 percent; Gift of Land, 1.5 percent; Memorandum of Understanding (Related to Land, Sales, Joint Venture, Surrender, Subdivision Agreements, 1.5 percent; Power of Attorney (Irrevocable/Land Related), 1.5 percent; Sales Agreement, 1.5 percent, among others. Estate developers/surveyors Some investors in the real estate sector have described the fiscal stance as not reflective of the socio-economic situation in the country and therefore should be suspended for now.
An estate developer and Chief Executive Officer of DealMorr Real Estate Limited, Abuja, Prince Moruff Adedapo, said, “Ordinarily, Nigerians struggle to meet up with their annual rent. But in this case, the government that is supposed to provide accommodation is still the one saying they should pay more for rent. The effects will be huge on both the tenant and the landlord, not on the real estate developers. “Unfortunately, it is not possible for tenants not to patronise our business because shelter is compulsory for everybody.
For the sales of properties, those who have to do so will do so. As hard as this time is, some still buy houses of N100m and above.”
Another estate developer in Abuja, Mr. Nasiru Ibrahim, said the six percent stamp duty on tenancy was not reasonable. Mr. Ibrahim said, “Although stamp duty has been in existence prior to now, if the government wants to re-emphasise it, it should be made reasonable so that it will encourage people to comply’’.
He added that the duty would be transferred to the buyer or tenant, and that since six percent was a significant increase, the transactions might be done informally and hence deprive the government of the revenue.
An estate surveyor in Minna, Niger State, Dr Oluwole Kajola, said the measure would affect his job negatively because getting rent from tenants is a big problem and adding another amount to it would create serious issues.
He explained that “There is a downward review for tenants who are paying for the first year to 0.078, which won’t pay subsequently while the 6 percent is for those taking a lease for 21years. “As an estate surveyor, it affects us in the sense that tenants will want to deal with landlords directly thereby boycotting the stamp duty rate because landlords won’t bother them about the money once he or she gets the rent.
For us, that we usually have our banners on all our properties, the Federal Inland Revenue Service will follow up with us for such money. “The implication of such is that some of the state surveyors may decide not to put their banners on the property any longer but market it privately.
Our people are not also confident about the government because they believe the money will be embezzled as usual”, he added. Trade Union Congress (TUC) The Trade Union Congress of Nigeria (TUC) has rejected the six percent stamp duty on all tenancy and leaste agreements, describing the measure as another ploy to further impoverish Nigerians.
In a statement, the President of TUC, Comrade Quadri A. Olaleye, said: “Sometimes we wonder if there is any milk of kindness left in our leadership.
Should enforcement of stamp duty on house rent and Certificate of Occupancy (C of O) be on priority list of the FIRS at a time the country is experiencing a housing deficit and millions of Nigerians have lost their jobs? “Till date there are countries that are still giving out palliatives to cushion the effect of the coronavirus pandemic.
Some countries, apart from giving out palliatives, also take responsibility for utility bills like power, water, data, etc. We read that Ghanaians will not be paying for power throughout this year. Why is our case always different? Why increase our burden now?”
He said there were many bills Nigerians paid without enjoying commensurate services. Olaleye urged the federal government to immediately order FIRS to stay action if it did not want to incur the wrath of workers and Nigerians.
In Kano, Mr. Olusegun Owolabi, a corporate property owner, who spoke to Daily Trust, described the policy as “awkward and very unfortunate”, pointing out that it would be the tenant that would suffer the brunt.
He said, already, people, especially civil servants were being subjected to multiple taxation right from their salaries, and that adding six percent stamp duty to their rent would be another burden. Tenants’ reactions FCT As expected, tenants have been very bitter about the latest tax directive.
A tenant, Barr. Simeon Gbaa, said the increase was harsh and coming at the wrong time. “These are unprecedented times and the government shouldn’t be burdening the citizenry with high taxes. There are a lot of tenancy cases going through the courts because of tenants’ inability to pay their rent,” he said. Similarly, a tenant in Kubwa, Emmanuel George, wondered why the federal government churned out policies that would inflict pains on poor Nigerians, especially at a time when the majority had lost their jobs. According to him, “Ordinarily, stamp duty charges are supposed to have been cancelled now pending the time the world will recover from the coronavirus pandemic ravaging the world.”
The CEO of AfriVert Global Services, Ustaz Usman Sani, said it was irresponsible for the government to insist on raising revenue at the expense of the average Nigerian at this difficult period of COVID-19. “Many businesses are struggling to survive.
For over three months, some business could not open as a result of the pandemic, and barely a month after the country is back with activities, FIRS is ordering that six percent should be charged along with the rental fee, how is that good for encouraging business environment. Where is the ease of doing business here.” he lamented?
Muftah Jimoh, who resides in Kuje also lamented the hardship on the land, stressing that the FG should really think twice before taking some actions like the stamp duty on rents. “More than half the population of Nigerians are living in rented apartments and many are barely making ends meet. This will make many to be pushed out on the streets if they cannot afford their rents,” he said. Gombe In Gombe, some tenants and experts who spoke with Daily Trust said the new stamp duty on tenancy will further cripple the economy and increase hardship to the common man.
A tenant and public affairs analyst, Safiyanu Danladi Mairiga, said with the new stamp duty, house rent would go higher and that office and shop rents for petty traders and businesses would also go high. “This will thereby increase the level of hardship the common man is currently going through as a result of the COVID-19 pandemic,” he said.
The manager of a Cybercafe in Gombe metropolis, Abdullahi Mohammed, said every economic policy at this time should not be at the detriment of the common man. He said even before the COVID-19 pandemic, they had been finding it difficult to pay their rent, adding that it was an unwise decision to increase tenants’ burden at this critical time as it would further hurt their already struggling businesses. Calabar In Calabar, a tenant, Mr. Edmund Magnus, who is paying N400,000 annual rent for a three-bedroom flat in Calabar, said such additional charge would increase the burden on him and his family.
He said the new directive by FIRS should be rejected as much as possible as it would lead to lingering disagreement with attendant effects. Similarly, a legal practitioner, Simon David, said it would have effects on their clients who might already have challenges with their landlords over a backlog of indebtedness.
In Kano, Malam Umar Turaki, a tenant, lamented the policy, saying it was not good for the country. “This is madness, why are we borrowing policies that do not fit into our setting? Policies like this are meant for countries that value their citizens, countries that take shelter of the citizens as an issue of human rights, not societies like ours,” he said.
In Niger Some of the people who spoke on the matter described the decision as unrealistic, saying the government didn’t consider the masses before coming up with the stamp duty.
According to a tenant, Mr Enimola Adeniyi “It won’t work because people are in pain seriously. This government is out to inflict pain on people.
Landlords are making life difficult for tenants and instead of the government to come to our aid, they are coming up with an unrealistic tax on rent. What happened to other taxes we are paying? Related Stamp Duty: FIRS orders landlords, agents on 6% charge remittance NLC rejects 6% tenancy, lease stamp duty agreement Labour flays stamp duty on tenancy, lease agreements.
No comments:
Post a Comment