The Federal Capital Territory (FCT) is actively taking measures to boost its revenue streams.
Presently, the FCT generates approximately N200 billion in Internally Generated Revenue (IGR) annually. With the introduction of these fresh initiatives, the FCT-IRS envisions raising the IGR to over N300 billion per year.
In pursuit of this goal, FCT Minister Nysome Wike has given the green light to a comprehensive tax reform agenda aimed at enhancing revenue generation.
These pivotal initiatives encompass the implementation of Section 85 of the Property and Environment Tax Assessment (PETA), Section 31 of the FCT-IRS Act, and the introduction of capital gains tax, which hold the potential to augment the FCT’s revenue by a substantial 50 to 60 percent.
Notably, last week, the FCT Minister sanctioned the draft of the property tax regulation and the execution of Capital Gains Tax (CGT).
This revelation comes from the Executive Chairman of the FCT-IRS, Haruna Abdullahi, who disclosed this information in Abuja. He also highlighted that the FCT can sustain itself with its IGR.
Regarding the impending property tax regulation, Haruna Abdullahi stated, “A draft proposal for FCT property tax regulation was formally submitted to the Honorable Minister. Empowered by the FCT IRS Act, the Minister has the authority to formulate property tax regulations, and after extensive deliberations and input, the Minister endorsed the initiative, marking the beginning of an inter-agency collaboration.”
“This collaboration aims to ensure a comprehensive review of the draft through engagement with various stakeholders. Once finalized, the regulation will be officially approved, published in the government gazette, and swiftly put into effect, promising a significant positive impact on the FCT’s Internally Generated Revenue (IGR).”
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Simultaneously, a separate committee was established to lead the implementation of the capital gains tax law. Abdullahi revealed that evidence of capital gains tax payment will become a prerequisite for property title transfers. He expressed concern that voluntary compliance had led to minimal CGT payments. Nonetheless, with the Minister’s endorsement and a robust interagency partnership, plans are in motion to fully enforce the capital gains tax.”
The head of FCT-IRS anticipates that with both property tax and a fully executed capital gains tax in place, there will be a substantial boost in revenue. Abdullahi stressed that the primary focus of these initiatives is to ensure compliance with tax regulations, particularly concerning property title transfers.
The introduction of these new regulations and tax laws is anticipated to significantly enhance revenue generation for the Federal Capital Territory.
These initiatives constitute two of the three major steps being taken by the FCT Internal Revenue Service (FCT-IRS) to bolster the FCT’s Internally Generated Revenue (IGR).
Haruna Abdullahi added that the FCT-IRS is in the process of expanding its presence to cover all area councils within the FCT. Presently, it operates 16 offices and plans to open an additional 20 by the end of the next year.
The leader of FCT-IRS remains confident that these initiatives will facilitate increased revenue generation for the FCT, subsequently leading to improved services for its residents.
Discussing the impact of these new tax initiatives on the FCT’s financial performance, Abdullahi insisted that the implementation of the new property tax regulation and capital gains tax law “are expected to have a significant impact on the FCT’s financial standing.”
The resulting additional revenue will be channeled towards funding critical infrastructure projects and social programs in the FCT
