Abuja property owners should prepare to begin paying property taxes as Federal Capital Territory Minister Nyesom Wike has approved a draft property tax legislation for the city.
It was learned that, in accordance with the provisions of the Capital Gains Tax Act of 2004, the FCT’s Internal Revenue Service has started enforcing the capital gains tax in Abuja.
A person’s whole chargeable gains (after deducting permitted expenses from the calculation of such gains) on the sale of chargeable assets within a year of assessment are subject to a 10% CGT tax.
When revealing this to media in Abuja on Sunday, Haruna Abdullahi, the Executive Chairman of FCT-IRS, also mentioned that the revenue service of the capital city has grown its Internally Generated Revenue to over N140 billion.
Speaking about the steps the service was taking to increase revenue for the Federal Capital Territory, Abdullahi stated that the minister had given his approval to a number of important initiatives.
“The minister has approved some huge initiatives in the last three weeks that will definitely change the dynamics in terms of the bottom line,” the man stated. We recently sent the minister a draft proposal for the FCT property tax policy.
The minister is authorized by the FCT-IRS Act to develop property tax regulations for the FCT. After a lengthy discussion, we recommended it to the minister, who requested us to prepare a regulation. We complied, and he gave his approval to the idea.
As a result, we are reviewing it through an interagency partnership because the FCT-IRS alone completed the draft, but additional stakeholders are required. He therefore gave his approval to the effort to evaluate the text now and return later.
At the end of the day, he will sign the regulation after it has been gazetted and put into effect. Thus, that should indicate to you that the city’s IGR is seeing a significant boost in profitability.
He emphasized that this would also raise the FCT’s income targets as he went on to mention that the minister had also approved the full application of the capital gains tax in Abuja.
Additionally, we just established a new committee to carry out the Capital Gains Tax law. There was virtually little capital gains tax paid in the past since people merely chose to go ahead and pay.
However, after briefing the minister, he gave his approval for the interagency cooperation, so we can now start implementing the capital gains tax in its entirety.
“There is a property tax and a fully implemented capital gains tax in the Federal Capital Territory (FCT),” Abdullahi continued. “And a month ago, the minister approved the implementation of Section 85 of the Personal Income Tax Act and Section 31 of the FCT IRS Act through a circular.”
“In my first meeting I told the staff that we cannot do much if we do not implement Section 85, but it is a huge section that needs political support,” the head of FCT-IRS recalled saying when he took office two years ago. Naturally, the minister then showed up and gave his approval.
He went on to say that this would have a significant impact and that “that means that all of us must have a tax clearance certificate.” It is necessary for you to file your returns and obtain a tax clearing certificate.
“You cannot obtain a building permit because the development control unit requires proof of your tax payment and TCC, both of which must be verified by the relevant tax authority, before granting you permission to proceed.”
The implementation of Capital Gains Tax, Section 31 of the FCT-IRS Act 2015, Section 85 of the Personal Income Tax, and the recently implemented Property Tax regulation, according to Abdullahi, “should take us to certainly above 50 to 60 percent of what we are doing at the moment.” And that has a very favorable effect on the financial line.
When asked if the service was having trouble collecting taxes in the city, Abdullahi responded that revenue problems were political in nature because the organization needed the minister’s political will to get over several obstacles.
“For this reason, I bring up the fact that the minister has provided us with the necessary political backing, which has eased the load. Other ones include general problems with operations and unclear information about what is intended to happen and what really occurs.
“When you analyze the kind of emails we receive here, you can see that we have enormous hurdles from many parties. However, we make every effort to address them.
But now that the minister has shown that revenue concerns are important to him, he added, “all city stakeholders see that there is political will, they have seen the administration’s direction, and they will not play around with it.”