FCT Tax Reforms Targets N300bn Annual Revenue
The Federal Capital Territory (FCT) is taking steps towards boosting its revenue streams.
Currently, the FCT’s Internally Generated Revenue (IGR) is around N200 billion per year. With the implementation of these new initiatives, the FCT-IRS expects to increase IGR to over N300 billion per year.
To this end, the FCT Minister Nysome Wike has approved a comprehensive tax reform agenda aimed at enhancing revenue generation.
The key initiatives, such as the implementation of Section 85 of the Property and Environment Tax Assessment (PETA), Section 31 of the FCT-IRS Act, and the introduction of capital gains tax, have the potential to increase the FCT’s revenue by more than 50 to 60 per cent.
Last week, the FCT Minister approved the draft of the property tax regulation and the implementation of Capital Gains Tax (CGT)
This disclosure was made by the Executive Chairman of the FCT-IRS, Haruna Abdullahi in Abuja where he also revealed that the FCT can survive on its IGR.
Speaking to the impending property tax regulation, Haruna Abdullahi said “a draft proposal for FCT property tax regulation was formally submitted to the Honorable Minister.
“Empowered by the FCT IRS Act, the Minister holds the authority to formulate property tax regulations and following extensive deliberations and suggestions, the Minister approved the initiative, marking the commencement of an inter-agency collaboration.
“This collaboration aims to ensure a thorough review of the draft by engaging various stakeholders. Once finalized, the regulation will be signed, gazetted, and promptly implemented, promising a substantial positive impact on the FCT’s Internally Generated Revenue (IGR).
Simultaneously, another committee was inaugurated to spearhead the implementation of the capital gains tax law.
Abdullahi revealed that evidence of capital gains tax payment will be required before property title transfers can take place.
He lamented that voluntary compliance has resulted in minimal payment of CGT. “However, with the Minister’s approval and a robust interagency collaboration, plans are underway to fully enforce the capital gains tax” Haruna Abdullahi said.
The FCT-IRS boss anticipates that an FCT with both property tax and fully implemented capital gains tax, ther will be a considerable boost in revenue.
Abdullahi said that the main focus of these initiatives is to ensure compliance with tax regulations, particularly in relation to property title transfers.
The implementation of these new regulations and tax laws is expected to significantly increase revenue generation for the Federal Capital Territory.
These are two of the three major initiatives that the FCT Internal Revenue Service (FCT-IRS) is implementing to boost the FCT’s Internally Generated Revenue (IGR).
The other initiative is the implementation of Section 85 of the Personal Income Tax Act (PITA) and Section 31 of the FCT-IRS Act, which will allow the FCT-IRS to collect taxes on personal income from individuals and businesses with operations in the FCT.
The FCT-IRS is also working on harmonizing its tax administration system with the area councils to ensure that there is a seamless tax collection process across the FCT.
Haruna Abdullahi added that the FCT-IRS is working on expanding its reach to all area councils in the FCT. It currently has 16 offices and plans to open 20 more by the end of next year.
The FCT-IRS boss is confident that these initiatives will help the FCT to generate more revenue and improve its services to residents.
Speaking to the impact these new tax initiatives will have on the bottom line of the FCT’s revenue, Abdullahi insisted that the implementation of the new property tax regulation and capital gains tax law “are expected to have a significant impact on the bottom line of the FCT’s IGR”.
This additional revenue will be used to fund critical infrastructure projects and social programs in the FCT.
