The Federal Inland Revenue Service (FIRS) has announced that stamp duty will be paid on Certificate of Occupancy (C of O) and house rent, in line with its new adhesive duty. This move is driven by the need to reduce disputes in real estate related transactions and create more revenue
The development was disclosed in a press statement by the FIRS Director for Communication and Liaison Department, Mr Abdullahi Ahmad, in Abuja, on Thursday July 2, 2020.
He explained that the new policy was vital to give the instruments the legal backing required, and ensure they are legally binding on all parties involved in such transactions.
Consequently, Ahmad asked Nigerians to verify that the documents related to rent and lease agreements for homes or offices, C of O, and other frequently used business-related transaction instruments are authenticated with the new FIRS Adhesive Stamp Duty.
While quoting the Executive Chairman of FIRS, Ahmed said, “The following are the chargeable transactions in the Fixed Duty Instruments category, Power of Attorney (PoA), Certificate of Occupancy (C of O), Proxy form; Appointment of Receiver, Memorandum of Understanding (MoU), Joint Venture Agreements (JVA), Guarantor’s form, and Ordinary Agreements Receipts.
“While ad-Valorem Instruments chargeable under the Stamp Duties Act are Deed of Assignment, Sales Agreement, Legal Mortgage or Debentures, Tenancy or Lease Agreement, Insurance Policies, Contract Agreements, Vending Agreement, Promissory Notes, Charter-Party and Contract Notes.
“Stamp duty is basically charged in two forms, either ad valorem where duty payable is a percentage of the consideration on an instrument or a fixed sum irrespective of the consideration on dutiable instrument or document.’’
The tax will be collected by the landlord and paid annually to the government coffers.