Property owners in Abuja should get ready to start paying taxes on their properties as the Minister of the Federal Capital Territory, Nyesom Wike, has approved a draft property tax regulation for the city.

It was gathered that the FCT-Internal Revenue Service had commenced the implementation of Capital Gains Tax in Abuja, as stipulated in the Capital Gains Tax Act 2004.

The CGT imposes a tax of 10 percent on the total amount of chargeable gains (after making allowable deductions from the computation of such gains) accruing to any person on the disposal of chargeable assets in a year of assessment.

The Executive Chairman, FCT-IRS, Haruna Abdullahi, who disclosed this to journalists in Abuja on Sunday, also stated that the capital city’s revenue service had been able to grow its Internally Generated Revenue to about N140bn.

Commenting on measures being put in place by the service to drive revenue for the FCT, Abdullahi said the minister had approved some key initiatives to achieve this.

He said, “In the last three weeks, the minister has approved some initiatives that are huge and will certainly change the dynamics in terms of the bottom line. Just the other day, we submitted a draft proposal to the minister for the FCT property tax regulation.

“The FCT-IRS Act empowers the minister to come up with a property tax regulation for the FCT. So we had a long conversation and we suggested it to the minister, and he asked us to come up with a draft regulation, which we did, and he has approved the initiative.

“So we have an inter-agency collaboration whereby we review it because the draft was just done by the FCT-IRS, but that’s not enough, you need other stakeholders. So he approved the initiative to go ahead and review the draft and then come back.

“Subsequently at the end of the day, he will sign the regulation and is gazetted and implemented. So that alone should tell you that there is a huge positive impact on the bottom line of the IGR in the city.”

He further pointed out that the minister also approved the full implementation of the Capital Gains Tax in Abuja, stressing that this would also increase the revenue targets of the FCT.

“Also, just recently we inaugurated another committee, we are now implementing the Capital Gains Tax law. Previously people just voluntarily go and pay, so there is very little payment in terms of capital gains tax.

“But now we have briefed the minister and he has approved the inter-agency collaboration and so we are now going to begin to implement the Capital Gains Tax fully.

“So you can imagine an FCT with a property tax, a fully implemented Capital Gains Tax, and then about a month ago there was a circular where the minister approved the implementation of Section 85 of the Personal Income Tax Act and Section 31 of the FCT IRS Act,” Abdullahi added..

The FCT-IRS boss noted that when he assumed office two years ago, “in my first meeting I told the staff that we cannot do much if we don’t implement Section 85, but it is a huge section that needs political support. And, of course, the minister came and he endorsed that.”

He explained that the impact of this would be huge, adding that “what that means is that all of us must have a tax clearance certificate. You must file your returns, you must get a tax clearance certificate.

“You cannot get a building permit, for before the development control unit can give you the permit to go ahead, you need to show that you are paying your tax and you have a TCC and it must be verifiable by the appropriate tax authority.”

Abdullahi stated that these three major initiatives, the implementation of Section 85 of Personal Income Tax and 31 of FCT-IRS Act 2015, implementation of Capital Gains Tax and then now the Property Tax regulation, “should take us to certainly above 50 to 60 percent of what we are doing at the moment. And that is a huge positive impact on the bottom line.”

On whether the service was facing challenges in terms of collecting taxes in the city, Abdullahi stated that revenue issues were political issues because the agency required the political will of the minister to overcome a lot of challenges.

“This is why I mention the fact that the minister has given us the required political support and that has lessened the burden. Other ones are general operational issues and lack of information in terms of clarity of what happens and what is supposed to happen.

“We face significant challenges from many stakeholders when you consider the kind of letters we receive here. But we try as much as possible to deal with them.