Double Taxation: FG Urged to Harmonise Collection Processes
Kasim Sumaina in Abuja
The federal government has been urged to speed up processes of tax harmonisation in the country to avoid undue double taxation of citizens.
The call comes ahead of the new tax law taking effect on January 1, 2026.
The new tax law aims to simplify tax collection and reduce the burden on taxpayers even as it introduces changes to personal income tax, corporate tax, Value Added Tax (VAT), and STEM duties in free zones.
For instance, individuals earning below N800,000 per year will be exempted from personal income tax, while those earning above will pay progressive taxes based on their income.
Despite the efforts to simplify tax collection, businesses still face challenges in complying with tax laws. One of the major issues is double taxation, where businesses receive demand notices from multiple agencies, leading to confusion and unnecessary stress.
Chief Technical Officer of INITS Limited, Mr. Femi Taiwo, made the call yesterday on the sidelines of a one-day training on the new tax laws for staff of the Federal Capital Territory Inland Revenue Service (FCT-IRS), the Federal Capital Territory Administration (FCTA) and some Abuja-based revenue generating agencies.
Taiwo, noted that while the government aims to harmonise tax collection processes to eliminate double taxation and make it easier for taxpayers to comply, the move will involve creating a centralised system for tax collection and providing taxpayers with a single view of their tax obligations and payments.
According to him, INITS, a credit consulting company, is providing technology solutions to help the FCT Revenue Collection Agencies streamline their processes and reduce revenue leakage.
“The company is implementing a unified tax pay ID system, which will enable taxpayers to track their tax obligations and payments in real-time.
“The harmonisation of tax collection processes is expected to have several benefits, including increased efficiency, improved transparency, and increased revenue collection. It will also reduce the administrative burden on taxpayers and make it easier for them to comply with tax laws.”
Taiwo, however, stressed that there is a need for increased awareness of tax laws and obligations among taxpayers, particularly at the grassroots level, noting that the FCT Revenue Collection Agencies are working to educate taxpayers on their obligations and the benefits of paying taxes.
He said, “The harmonisation of tax collection processes is a step in the right direction towards creating a more efficient and transparent tax system. It is expected to have a positive impact on businesses and individuals, and to increase revenue collection for the government.”
Similarly, Acting Chairman FCT IRS, Mr. Michael Hadi Ango, noted that the current silo tax collection system has several drawbacks where different agencies collect revenue based on their own establishment laws or practices, leading to inefficiencies and lack of transparency.
The approach Ango hinted can result in taxpayers being required to pay multiple visits to different agencies, which can be time-consuming and costly.
According to the FCT IRS boss, “A centralised tax collection system would provide a single point of collection and accounting for revenues due to any entity. This would bring about several benefits, including: Increased efficiency where taxpayers would only need to visit one agency to pay their taxes, reducing the administrative burden.
“Improved Transparency and streamlining tax collection to enable the government to increase revenue generation and reduce tax evasion.”
He added that enhanced accountability through a centralised system would enable the government to also track revenue collection and utilisation.
He further explained that the FCTA, with the support of INITS, is working to implement a centralised revenue collection system that would enable taxpayers to make payments through a single platform and provide real-time information on tax payments.
He, however said that by addressing the issue of silo tax collection processes, the federal government can create a more efficient and effective tax system that benefits both taxpayers and the government.
