A news analysis by Cecilia Ijuo, News Agency of Nigeria (NAN)
The wish of Mr. Haruna Abdullahi, Acting Chairman of the Federal Capital Territory Internal Revenue Service (FCT-IRS), is to place FCT first on the national Internally Generated Revenue (IGR) table.
Undoubtedly, taxation is one of the most practical and effective means of generating revenue for national development.
Understanding the importance of taxation, the International Monetary Fund (IMF) report on tax policy in developing countries asked, “Why do we have taxes?
“Until someone comes up with a better idea, taxation is the only practical way to raise revenue to fund government spending on the goods and services most of us demand.”
This statement provides a comprehensive and compelling reason why taxation is so fundamental to development.
No wonder the Nigerian government is ordering states to improve their tax nets to bolster declining oil revenues.
There is no doubt that the Federal Capital Territory Internal Revenue Service (FCT-IRS) understands this reality following its recent push to widen its tax net to make FCT number one on the internally generated revenue chart. (IGR).
The service, which began operating in 2018 following the enactment of the FCT-IRS Act 2015, has grown from generating tax revenue of approximately N60 billion in 2018 to over N100 billion. in 2021.
In 2021, the FCT came third on the national RGI table after Lagos and Rivers and it is determined to surpass its 2022 target of N200 billion to around N500 billion.
FCT-IRS Acting Chairman Haruna Abdullahi recently said the service is working to exceed its 2022 target of up to 500 billion naira.
He said the service has embarked on various forms of reform ranging from harnessing technology, training staff, information campaigns and direct engagement in the form of town halls, among others.
“We hope to reach well beyond our target of N200 billion up to N500 billion because as we speak we have additional people who have entered the tax net significantly.
“Furthermore, through the engagement we have with the media and the public, we believe that people will start to view paying taxes as a duty and when that is achieved, 500 billion naira will be insignificant.
“So we’re putting processes in place and simplifying them while building an internal structure for sustainability.
“We are also engaged in training and retraining our staff members and hopefully over the next year there will be no problem of lack of human capacity,” he said. .
Abdullahi said the huge economic activities taking place in the FCT is an added advantage for the service to generate huge revenue.
Speaking on using technology as a great tool to achieve its mandate, Abdullahi said the service has started to register huge success with its adoption.
“As a service, we recognize the importance of IT solutions, hence the automation of our taxpayer services, tax management and administrative processes.
“Our progress has been incremental in our quest to achieve a fully-fledged digital system.
“We provided a self-service portal for taxpayers to generate Tax Identification Numbers (TINs), validate and verify TIN via USSD, mobile apps and the web in addition to filing tax returns.
“It eased the burden of going to tax offices and reduced human error and processing times.
“The service has fully integrated and adopted the Joint Tax Board (JTB) TIN for all of its taxpayers to ensure uniform standards.
“Furthermore, to simplify the process of remittance of income, the payment gateway that taxpayers benefit from is the Remita platform which enables seamless inflow,” he said.
On efforts to ensure transparent engagement with taxpayers, Abdullahi said, “People can visit our website or social media platforms for information on tax returns and other tax matters.
“For example, our USSD code for tax identification number (TIN) is *7737*22# which can be verified using a registered phone number, NIN or BVN.
“Also, our website is https://fctirs.gov.ng while the number to dial to lodge a tax complaint is 0700 220 0002.
“Thus, with these avenues among others, people do not need to come to our offices to obtain an answer to their questions.
“We are also opening up other platforms to engage with younger people.”
Speaking at a recent tax seminar titled: “Reviving the culture of filing tax returns,” Abdullahi said the department is working to revive the filing of tax returns in the FCT.
He said filing tax returns was key to providing funds to the government to deliver public services critical to sustainable development in the FCT.
Regarding the department’s efforts to verify fraudulent tax compliance practices, the Acting President said that the unethical conduct of some tax advisers who encourage tax agents to check records or refuse to update availability of the necessary documents to have a fair assessment of taxes was worrying.
He said the service has also observed the worrying trend of hiring non-professional consultants by taxpayers to prepare and file returns, with apparently very wealthy people being encouraged to file incomes as low as N1-2 million. .
“The service wants to establish a strong enforcement regime to discourage the practice of tax evasion through such ridiculous tax returns.
“As the service works to define its enforcement strategies for tax evaders, we will not relent in our efforts to create an institutional framework of stability to improve collections at this stage of our journey and beyond.” , did he declare.
While reinforcing Abdullahi’s position on tax compliance, Ms.
Ngozika Jipreze, Director of Legal Services, FCT-IRS, in a presentation on tax enforcement, said non-compliance often undermines the government’s ability to generate sufficient revenue for socio-economic development.
She said the service was set up to ensure compliance, pursue and collect all unpaid tax debts arising from self-assessment, tax audit, tax investigation and formal notices, among others, in accordance with articles 8, 22, 35, 36, 37 of the FCT-IRS law, 2015.
Speaking about the powers of the FCT-IRS, Jipreze said Section 8(1)(C) of the FCT-IRS Act empowers the service to “assess the account and enforce payment of any taxes that may be due at the FCT”.
She said enforcement could be made on all taxes and levies collectible by the FCT-IRS, as provided for in the First Schedule of the FCT-IRS Act.
The director said the service would be sure to work with the Nigeria Police Force and other law enforcement agencies to ensure tax compliance.
She said that under Section 38 of the law establishing the FCT-IRS, “the service may co-opt the assistance and cooperation of the Department of State Services (DSS) and the Security and Defense Corps Nigeria Civil Service (NSCDC), among others, to ensure compliance.”
Corroborating the remarks of the FCT-IRS Acting Chairman during the Tax Seminar held in Abuja, Mr. Mark Dike, Retired Director of Tax Policy and Legislation, Federal Inland Revenue Service (FIRS), decried Nigeria’s low taxation relative to gross domestic product (GDP).
Dike, who is also a former president of the Chartered Institute of Taxation of Nigeria, said Nigeria’s tax-to-GDP ratio has been around 6% in recent years.
“In comparison, the average for about 30 African countries ranges from 15.1% in 2010 to 16.5% in 2018.
“The World Bank recommends a tax-to-GDP ratio of 15% as a key ingredient for economic growth and ultimately poverty reduction,” he said.
The News Agency of Nigeria (NAN) reports that the FCT-IRS was established with the enactment of the FCT-IRS Act of 2015.
The service took over administration of personal income tax from the Federal Inland Revenue Service (FIRS) in January 2018.
It is the only ‘state’ revenue service in Nigeria which is established by the National Assembly and is empowered to administer tax and non-tax revenue accruing to the FCT.
The Service is also responsible for coordinating the collection of all other revenue accruing to the CTF, among others. (NanFeatures)