In a bid to shore up their IGR profiles, The governors of Niger and Nassarawa States – Abubakar Sani Bello and Umaru Tanko Al-Makura – are set to join forces to block loss of tax revenues due to their two states. The states claim to have evidence that they lose billions of naira annually due to taxes deducted form their residents being paid in error to Federal Capital Territory. (FCT).
The two states share borders with the FCT and thousands of Abuja workers actually reside within the two states in areas like Suleja, Tafa and Madalla ( Niger State) Karu,Masaka, Mararaba,Ado, New Nyanya in Nasarrawa State which are havens of lower cost housing. However despite the fact that the Personal Income Tax – Residency Rule clearly stipulates that taxes are due to the state in which a worker resides rather than where they work,, taxes are deducted at source and automatically paid to FCT.
This practice is said to be depriving the border areas of the two states of much needed development in the forms of roads, schools and facilities. The clamour of people in the affected areas for development is said to have motivated the two governors’ decision to embark on a mass sensitisation programme of employers in Abuja as well as residents in the two states.
Speaking on the matter a source said that the governors agreed to work together to save costs and make the process more straightforward for their respective residents.
The project called Abuja Borders Enumeration 2017 is understood to be commencing on Tuesday . It is further understood that a joint press conference is also being planned by the governors as well as radio and television sensitisation.
It is estimated that over 400,000 Abuja workers live within the two states, commuting daily to the FCT. Many work for the Federal Government Ministries, Departments and Agencies whilst others are employed in the private sector as well as embassies. The borders with the two states are as close as 15 minutes drive from the Central Area of Abuja which means that many residents are unaware that they live outside the FCT and thus unaware that their taxes are being wrongly remitted.
Residency Rule disputes have become a feature of tax collection between states that share borders. Ogun State in 2011 launched a well publicised Residency Rule campaign to which was said to have resulted in the registration of over 200,000 new tax payers whose taxes had previously been erroneously remitted to Lagos State.