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.
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.
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