Experts fault FG’s new stamp duty on rent, certificate of occupancy, others

 
Mon Jul 6th, 2020 - Abuja (FCT)
 


Estate surveyors and valuers have picked holes in Federal Government’s decision to collect stamp duty on house rent agreement and Certificate of Occupancy (C of O), saying the move is like putting new wine in an old bottle.

The surveyors, under the aegis of Nigerian Institution of Estate Surveyors and Valuers (NIESV) who are vested with land matters in the country, believe that the policy amounts to multiple taxation and should not have been made mandatory this period the real estate sector is in comatose.

The Director, Communications and Liaison Department in the Federal Inland Revenue Service (FIRS), Mr. Abdullahi Ahmad, had in a statement in Abuja last week urged Nigerians and other residents to ensure that documents pertaining to rent or lease agreements for their homes or offices, C of O, as well as a list of other common business-related transaction instruments are subjected to authentication with the new FIRS Adhesive Stamp duty.

But the professionals said the decision smacked of stark insensitivity and misunderstanding of the realities in the property market. According to Mr. Filani Julius Olarenwaju, NIESV chairman, Ondo State Branch, the decision is strange, ill-timed, unacceptable and unwelcome development. He stressed that it will bring hardship to the already impoverished Nigerians, as they are still unable to pay their rents at even at very low price.

Olarenwaju expressed worry over the government’s inability to lessen people’s burden. He added that the government should be concerned with policies to curb skyrocketing prices of building materials’, than subjecting Nigerians to more hardship by the decision to tax rent.

Similarly, his Enugu State counterpart, Dr. Celestine Obinna Aniagolu, said there are so many things; the government should do in this time, which they have left undone.

Stamp duty on rents and C of O, he said, is not one of them and therefore not appropriate for now because the people, who they gave C of O pay ground rents. Property owners cannot pay ground rent and at the same time pay stamp duty on rents that they collect, because it amounts to double taxation.

For the Kaduna State chairman of the institution, Mr. Olubunmi Ogundiya, this is not the best time to introduce such policy because of the economic realities.

He stressed that if the government cannot provide housing for Nigerians, it should at least encourage people, who are struggling to provide housing for them and not to tax those paying rents.

Ogundiya said, as it is now, people can barely pay their rents talk less of paying tax on it. “If we are talking of lease, maybe lease for companies, which take longer years, it is understandable. But for someone who just paid one year rent that he could barely afford and you are now putting tax on it, “this is improper,” he said.

“Government should realize that housing is a necessity just as Garri is a necessity for survival because you need to put something in your mouth, that it the same with housing. It is like taxing plantain; that is what it means, whereas the same government said there are some goods that are not to VAT enabled.

“ So why are we paying tax on ordinary rents, if somebody, who is renting two bedroom flats for may be N100, 000, he will pay tax on it, it amounts to telling him not to rent a house at all and stay on the street after he has paid his personal income tax”, he added.

 
 

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source: Guardian