Despite meeting most of its revenue targets, the Federal Capital Territory is still grappling with issues of low tax compliance, as only about 10 percent of its registered tax payers actually remit their taxes into government coffers.
According to the FCT Internal Revenue Service, FCT-IRS, 90 percent of the residents registered for tax, do not file their returns at all.
The acting chairman of the Service, Haruna Abdullahi, who stated this at a tax seminar on reviving the culture of filing tax return in the nation’s capital, said most residents only file and pay taxes when they want to transact business with the authorities.
‘’From our records, the number of taxpayers under the PAYE scheme is about 120,000 with half of the figure comprising staff of Federal Government Ministries, Departments and Agencies, MDAs, on the IPPIS platform and those working for the FCTA and the Area Councils.
‘’This implies that 90 percent of the FCT residents registered for tax do not file their tax returns; meaning that only 10percent of the registered taxpayers file their tax returns.
‘’In response to this challenge and to cushion the effect, the Service has introduced the Key Account Managers, KAM, who follow up with taxpayers via one on one basis,’’ the chairman explained.
The chairman was however hopeful that the seminar would address the issue of low tax compliance among the residents since the most sustainable source of public finance remains taxes and levies.
In his address, the FCT Minister, Malam Muhammad Bello, advised that tax evasion should be treated as the crime that it is.
The minister who was represented by the Mandate Secretary of FCT Economic Planning, Revenue Generation and Public-Private Partnership, Alhaji Lukman Agboola, encouraged residents to take filing of returns as an obligatory and necessary step towards supporting the socio-infrastructural development of FCT.
“We must understand that taxation is not just a means of providing funds for services and infrastructure, it is also a means for the high earners to contribute for the upliftment of the quality of life of the low earners.”
He lamented that it was worrisome that only 10 percent of registered residents of the FCT are contributing to the maintenance and development of the territory by paying their taxes.
” It is however worrisome that, according to reports reaching me, only 10 percent of registered residents of the FCT are contributing to the maintenance and development of the territory by paying their taxes.
” This needs to change, both for fairness and entrenchment of the rule of law. We must begin to treat tax evasion as the crime that it is,” he said.
Also in his keynote address, the Managing Director, JK Consulting, Dr James Naiveju, urged legislature, the judicial, public servants and professional to ensure timely and complete filing of their tax returns.
Naiveju said if all FCT residents agree to file their tax returns effectively, it would enhance the economy and reduce the rate of poverty.
“A proud residents of the Federal Capital Territory has a moral and civil responsibility to file their tax returns with utmost patriotism to the fatherland.
” There must also be patriotism, determination, political will on the part of the authority to ensure that citizens file their tax returns as at when due.”