Tackling Multiple Taxation in the FCT

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Following complaints of multiple taxation received from business owners operating within the Federal Capital Territory, Paul Obi examines proactive steps taken by the FCT minister to reverse the trend.

Recently, the FCT Minister, Malam Muhammad Musa Bello, announced that one of the quick-wins expected from the newly reconstituted FCT Internal Revenue Service (FCT-IRS) is the harmonisation of the various and sometimes conflicting taxes that businesses have to pay. This is often referred to as multiple taxatsion.

Business organisations in the Federal Capital Territory have for years, grappled with the challenge of multiple taxation. These include tenement rates, property taxes, ground rents, environmental charges, Education Tax Fund and Nigerian Social Insurance Trust Fund deductions and other taxes charged by the three-tiers of government.

These outfits have had to respond to payment demands from the Federal Inland Revenue Service (FIRS), the Federal Capital Territory Administration and the six area councils in Abuja who churn out by-laws imposing taxes on citizens and businesses at every turn in order to boost revenue generation.

Recently, a group representing the 250 hotels in Abuja, The Abuja Hotel Owners Forum, raised concerns over the negative impact of multiple taxation on members leading to negative outlook on their finances. In the same vein, the National Association of Proprietors of Private Schools (FCT chapter) raised issues against multiple taxation inflicted on schools by government agencies.

Speaking on the development, the Chairman of the group, Mrs. Sarah Jubril, stated that in an attempt to overcome the economic recession, some fraudsters had hijacked the process of collecting taxes and threatened to shut down their schools if they failed to comply.

She said the group equally pays local government levies on school buses, besides other levies collected for inspection and accreditation purposes hitherto supervised by the Department of Quality Assurance, a regulatory department of the Education Secretariat of the FCT.

“Despite these, we are saddled with multiple and heavy taxes which are frustrating and compete with genuine needs of our businesses,” said Sarah.

The legislative arm of the Abuja Municipal Area Council some months ago held a public hearing over its plans to re-introduce the controversial “park and pay” policy. A policy that requires vehicles parked in designated areas to pay a certain amount of money depending on how long the vehicle stays in the particular spot.

The controversial policy, originally conceived by the last administration of the Federal Capital Territory, was halted by an Abuja High Court over abuses that attended it by the operators and the essential fact that it lacked an enabling law.

The Minister of the Federal Capital Territory, Muhammad Musa Bello, at a recent function in Abuja also expressed concerns over the persistent issue of multiple taxation, stating that the FCT Administration has put machinery in motion to tackle the challenge especially with regards to improving Nigeria’s ranking on the World Bank Ease of Doing Business Index.

“One area that has been of great challenge to us is the multiplicity of taxes that FCT residents pay. It’s something that is of great concern and jointly with the Federal Inland Revenue Service together with the FCT Inland Revenue Service which will soon be operational, will work on what is already being done nationally so that we can harmonise all these taxes,” the minister said.

“The ultimate goal is for businesses and organisations to just make one payment to a particular agency and that agency divides the payments to all the others. That way, you don’t have to communicate with five or six different people coming to you and you don’t know who is genuine and who is not genuine. I can assure you that we are on the path towards being able to surmount that.

“With regard to taxation, I want to clearly tell you now that any person that comes to you and says pay tax into a private account, don’t pay. Taxation is for government. Even if for any reason, taxes are being collected through consultants and so on, first and foremost, the taxes go to government coffers, then government pays the consultants. If you have a problem, report to me directly through your association,” the minister told a delegation of Abuja Hotel Owners Forum.

Bello added, “On the issue of the tenement rate and area of the jurisdictions of the area councils, particularly AMAC, it’s something that is in the court, so I will not say anything right now. But what we are trying to do will take care of all these and everybody will be carried along.”

President Muhammadu Buhari penultimate week approved the reconstitution of the Board of Federal Capital Territory Internal Revenue Service (FCT-IRS) with Abdulahi Oteh Attah as Chairman/Chief Executive.

This was contained in a circular signed by the FCT Permanent Secretary, Dr. Babatope Ajakaiye dated April 21, 2017. Members of the Board are Ahmed Garba, Barrister Hamza Hashim, Saa Godwin Gbue, Edward Adedamola, Mrs. Blessing Ifeyinwa and Ms. Benedicta Atto.

The circular added that this is in addition to the statutory members of the board provided for in Section 3(2)(a) of the FCT-IRS Act 2015 which the following directors/officials of the FCT Administration which include, Director of Treasury as Deputy Chairman, Solicitor-General, Legal Services Secretariat as member and Director of Land Administration as member. Others are the Director, Administration and Finance (Area Council Services Secretariat), Member, Co-ordinator, Abuja Infrastructure and Investment Centre, member, Director, Department of Economic Planning, Research and Statistics, member and Director of Information and Communications, member.

With the steps taken so far by concerned authorities, businesses are hoping for a tax regime that would guarantee profitability, eliminate illegal tax collection and generally improve Nigeria’s ranking in the World Bank Ease of Doing Business index. On this, those operating businesses in Abuja have given kudos to the FCT minister for this timely intervention.