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NLC Rejects 6% Tax On Tenancy And Lease Agreements

Channels Television  
Updated July 25, 2020
President of the Nigeria Labour Congress, Ayuba Wahab (File Photo).

 

The leadership of the Nigeria Labour Congress (NLC) has described the decision of the Federal Government to impose a six per cent stamp duty on every tenancy and lease agreement in the country, as a harsh fiscal policy that is insensitive to the plights of citizens.

In a statement issued on Saturday, the NLC President, Mr Ayuba Waba, rejected the new stamp duty policy of the Federal Inland Revenue Service, (FIRS) and instead, recommended that the government considers introducing property tax on the numerous unoccupied houses across the country that are presumably owned by the rich.

The statement also described the decision to enforce the tenancy and lease agreement tax, as illogical and inhumane, especially because of the harsh economic realities of the COVID-19 pandemic on the poor.

Read Also: Stamp Duty: Landlords Must Collect, Remit 6% On Tenancy, Lease Agreement – FIRS

“We call on the Federal Government and the Federal Inland Revenue Service to rescind this harsh fiscal measure as it is boldly insensitive to the material condition of Nigerians which has been compounded by the Covid-19 health insurgency.

“Nobody would want to be a tenant if they had an alternative. This means that tenants which this new policy targets are some of the most vulnerable people in our society. It would be illogical, insensitive and inhumane to churn out laws that make our poor go to bed at night with tears in their eyes.

“The principle of public taxation especially progressive taxation all over the world is that the rich subsidises for the poor. Every tax policy that would be enforceable must create a safety net for the poor. Recent policies of government indicate otherwise. Accommodation is a fundamental right guaranteed by Nigeria’s constitution.

“It is unimaginable that tenants who are in the most vulnerable group would be expected to pay 6% tax for accommodation when sales tax is 1.5%. This is indeed a great injustice against the Nigerian poor. Government must take deliberate steps to avoid institutionalizing the widespread belief that it is a crime to be poor in Nigeria,” the statement read in part.

The Federal Inland Revenue Service (FIRS), on July 22, asked landlords and property agents to ensure that they charge 6 per cent Stamp Duty on all tenancy and lease agreements they enter into with all renters and remit same promptly to the Service so that they do not run foul of the Stamp Duty Act.

According to the Executive Chairman of the FIRS, Muhammad Nami, property-related transactions like tenancy or lease agreement fall under the Ad Valorem category of the stamp duty which attracts 6 per cent duty payable in the percentage of the total value or sum of the tenancy or lease.