Leadership

90% Of Nigerians Not Filing Tax Returns – Abdullahi

Haruna Abdullahi is the acting chairman, Federal Capital Territory Internal Revenue Service. In this interview with MOSES ORJIME, he speaks on a wide range of issues but dwelt more on efforts being made by his administra­tion to raise FCT revenue.

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There seems to be a misunderst­anding regarding tax returns, especially for people working in the formal sector. Does the deduction made from employees’ salaries cover their tax obligation­s?

No, it does not cover their tax obligation­s. This is majorly because the deduction made from theirsalar­ies is just one part of their assessment or filing. For example, as anemployee who work with FCT IRS, we will make deductions on monthly basis basedon PAYE and remit same to FCT IRS. The law spells it out you should file yourtax return. So, as an individual, you are supposed to visit the tax authority,such as the website of the FCT IRS. Weencourag­e online assessment, where you can as well assess yourself and sendyour assessment to us. It is important to note that if you have multiple sources of income, you are expected to declare your income and give a breakdown to easethe stress of all. G

Usually, at thebeginni­ng of every new year, you are supposed to disclose what you generated,be it what you earned from salary, dividend, rent, etc from the previous year. Once that is completed, you go ahead to apply for a tax clearance certificat­e.So, people mistake the fact that because they say you deduct at source thenthat is it; that is just one part, and the responsibi­lity of the deductinga­uthority is to remit after deducting. As an individual, you have aresponsib­ility to file your tax return by filing what we call form A; and on this form A, you are supposed todeclare all income from all sources, it is very clear, and the law is veryclear. Also, it is an individual’s responsibi­lity, it is not your office thatwill do it for you and if you don’t, the law is very clear of what the penaltiesa­re for not doing that. Section 26 of the Finance Act is very clear in terms ofthe penalties of what happens if you don’t and so we are trying to encouragep­eople to do that. But unfortunat­ely, 90 percent of the people that will bereading this paper today are already in breach of this.

90 percent signifies a very huge loss. Can this anomaly be corrected. If yes, how?

As tax administra­tors, we are faced with a very huge responsibi­lity.The truth is that our mandate is not only limited to collection of tax but alsoto educate and enlighten tax payers of their obligation­s. I can proudly saythat we are doing that through series of sensitisat­ion campaigns, road shows,particular­ly by the FCT IRS as well as through our TV programmes, newspapers advertsand interviews. We do this often to continuous­ly engage the general public. So, both the administra­tor and the individual have a role to play in terms of this.Of course, we talked about this issue around filing, and I said it is a strictliab­ility issue, strict liability issue is scary, of course, in some countries,and more personal income tax and direct assessment contribute­s more than anyother forms of taxation. It is the place of citizens to contribute enrich thepurse of running government than other corporate taxes. Sadly, all that isdifferen­t in Nigeria. At the end of the day, if we are able to revive that culture, people getting to pay income taxes as individual­s, I bet you, funds to be turned in by all revenue generating agencies under the JTB platform willcertai­nly increase.

Your organisati­on partnered with the Nigeria Financial Intelligen­ce Unit recently. Would this help you in accessing financial data of individual­s and further boost your task collection strategy?

With the backing of the law, our relationsh­ip with NFIU will automatica­lly grant us access to informatio­n because the law isbacking it. This is because, it is one thing to have legal backing, and it isanother thing to have the needed informatio­n. So, with agencies like the NFIU,we have adequate access. As FCT IRS, we have decided that since we now haveunlimi­ted access to informatio­n, we will interrogat­e individual assessment. Now, the focus of the FCT-IRS is not the quantity of tax clearance certificat­e thatwe issue but the quality.

Individual­s should note that when they arecoming to file their returns at the FCT internal revenue service, they have tobe honest because we now have the capacity to interrogat­e their submission andto know everything about their financial dealings, businesses and other sourcesof income that they may fail to declare. The NFIU relationsh­ip like any otherrelat­ionship that we have tried to create, now gives us access to very vital informatio­n.

Citizens, especially small business owners, complain about multiple taxation. We’ve heard of people paying signage, environmen­tal bills/tax and so on. What are you doing about that?

Well, I think there are usually isssues about multiple taxation. Just like you mentioned signage, it is not tax for example. There are issues around taxation, yes, but sometimes dues,f ees and all that, are often collected by the local government authoritie­s.

Thetruth is that the constituti­ons

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