Unreasonable Stamp Duty

29/08/2014 15:51

Residential tenants should not be burdened with a hefty $500 stamp duty to be imposed by Fiji Revenue & Customs Authority (FRCA).

FRCA should consider removing or reducing the $500 stamp duty as stipulated in the Stamp Duties (Amendment) Decree 2013. The Council finds this amount to be unreasonable, unjustified and unfair tax.

The Consumer Council of Fiji‘s plea comes amidst concerns expressed by the consumers on the exorbitant amount.What Council fails to comprehend is why an impact study/review was not undertaken before introducing this national policy?

Housing is a crucial issue. To own a home remains a dream for many with unrealistic price of real estate properties in the marketplace. Many consumers have to make with renting homes. Tenants are already struggling to find affordable and livable rented properties. Some can barely pay their rent on time resulting in disputes with the landlords. There is also anecdotal evidence of a high turnover in residential tenancy.

In the last two and half (2012 to June 2014) years, the Council handled 516 complaints in relation to tenancy issues in the absence of adequate landlord and tenancy legislation. It is expected that when there is a dispute, either the landlord will evict the tenant or the tenant will decide to move out. Now, with such exorbitant stamp duty, tenants will have to think twice before moving out because a new tenancy agreement means extra $500 as stamp duty.

Stamp duty on residential tenancy agreement is being imposed when there are no adequate legislation to protect consumers in the case of disputes. How valuable is an agreement with stamp duty to the consumers when they do not have adequate legal protection?

It is unfortunate that these changes were made without consultation to understand the repercussion on a residential tenant. It is ironic that on one hand there is a rent freeze for residential tenants to ease their financial burden and on the other hand, FRCA is bestowed with the powers to impose $500 for each tenancy-agreement.

FRCA should be realistic with the application of stamp duty on residential tenants and small business to medium enterprises with the current housing situation and inadequate legislation to protect landlords and tenants.