Wike Approves Draft Proposal on Property Tax Regulation in Abuja

•FCT begins full implementation of capital gains tax 

•Expects 50% revenue rise

•Minister seeks UAE’s partnership in transforming Abuja into tourism hub

Ndubuisi Francis and Olawale Ajimotokan in Abuja

The Federal Capital Territory (FCT) Minister, Nyesom Wike, has approved the draft proposal on property tax regulation, designed to significantly boost internally generated revenue (IGR) in the nation’s capital.

This was just as Wike called for collaboration with the United Arabs Emirates (UAE) towards developing the tourism potential of Abuja. He tabled the proposal yesterday, at a meeting in his office with the UAE Ambassador to Nigeria, Salem Saeed Al-Shami ahead of President Bola Tinubu’s visit to the UAE for the 28th Conference of the Parties to the UN Framework Convention on Climate Cahnge (COP28) from November 30- December 12, 2023, at Expo City, Dubai.

THISDAY gathered that the approved draft proposal for the FCT was prepared and submitted to the minister by the FCT Internal Revenue Service (FCT–IRS) barely a week ago, who promptly approved it and returned to the revenue authority.

The FCT-IRS Act empowers the minister to come up with a property tax regulation for the Territory.

In an interview, the FCT-IRS Executive Chairman, Mr. Haruna Abdullahi who confirmed the development at the weekend, disclosed that following the ministerial  approval, an inter-agency stakeholder committee had been constituted to finetune the draft regulation after which it would be returned to the minister to sign into law and subsequently gazetted.

Abdullahi, who applauded Wike’s determination to turn around the fortunes of the FCT, noted that the Service had also inaugurated a committee for the full implementation of the Capital Gains Tax (CGT) law in the FCT.

A capital gains tax derived from the sale of any capital asset where the sale price exceeds the purchase price of the investment.

It is a 10 per cent chargeable tax on the capital gains arising from the disposal of capital assets, including stocks, bonds, and real estate, among others.

The FCT-IRS chief executive said: “Just yesterday, we submitted a draft proposal to the Honorable 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 to the Honourable Minister and he asked us to come up with a draft regulation which we did.

“And yesterday, an approval came back; he has approved the initiative. We now  have an inter-agency collaboration whereby we will  review– 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, to review the draft and come back.

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

Abdullahi, noted that his agency had inaugurated a committee for the full implementation of the capital gains tax law, adding that previously, there was very little compliance in terms of capital gains tax, adding that having briefed the minister and an inter-agency collaboration in place, the FCT-IRS would now begin to implement the capital gains tax fully.

The FCT-IRS Executive Chairman who was upbeat, noted that with the Property Tax, law in the offing, CGT already on the verge of full implementation, Section 85 of Personal Income Tax Act (PITA) and Section 31 of the FCT Internal Revenue Service Act, 2015 fully implemented, the revenue profile of can only get better by about 50 per cent.

Acknowledging that the FCT faces significant challenges from many stakeholders, which his agency tries to address as much as possible, he explained that with Wike as minister, “who has come and now showing that revenue issues are in the forefront for him,” the nation’s capital would make giant strides.

While applauding Wike’s unwavering resolve to turn the FCT around in all facets, Abdullahi stated: ” I am sure you have read that we have been taken out of the TSA (Treasury Single Account) strictly for revenue issues. So all stakeholders (I believe now in the city) see that the political will is there. And even internal stakeholders, our colleagues and all that have seen that, look; this is the direction of the bureaucracy of the administration.

“And certainly you would not joke with it. As we go along in the last three weeks, the Honorable Minister has approved some initiatives, which are huge in terms of which will certainly change the dynamics.

“And then, about a month ago, there was a circular. I’m sure some of you might have seen it, where he has approved the implementation of Section 85 of the Personal Income Tax Act and Section 31 of the FCT IRS Act.

“For me, when I came two years ago, in my first meeting, I told them, look, we cannot do much if we don’t implement Section 85. But that is a huge section that needs the political support.

“So, of course, Governor Wike came and he endorsed that. The impact of that is going to be huge. So, what that means is all of us now must have a tax clearance certificate (TCC).

“You must file your returns, you get a tax clearance certificate, because you cannot register your vehicle. DRTS (Department of Road Traffic Regulation) will have to get a TCC and verify it. You cannot get a building permit, even if it’s your wall that falls, before Development Control can give you the permit to go ahead to do that,” he said.

Abdullahi stated that Wike’s emergence had given a dramatic lift in terms of efforts to boost revenue and transform the landscape of the nation’s capital.

Meanwhile, Wike has called for collaboration with the UAE towards developing the tourism potential of Abuja.

The minister expressed desire for the nation’s capital to be transformed into a tourist destination in the same manner like Dubai city which had become a tourist centre of the world.

“Therefore, we are open to discussions, and I believe that when Mr. President is coming (visiting for the conference), the FCT will partner and be part of the delegation, so as to be able to discuss on tourism as an economic means to both countries.

“I am glad that the relationship is getting better and better than what it used to be. I know for the President, governance is business, and whatever that is going to make Nigeria great is what he is going to stand for.

“So we are here as his foot soldiers to complement his effort to seeing that his renewed hope agenda  is fulfilled,” Wike said.

He also urged the UAE authority to earnestly resolve the visa restriction on Nigerians and flight issues between authorities and Emirates so that genuine visitors can travel to Dubai for tourism and business.

In his remarks, Ambassador Al-Shami expressed his passion for Nigerians and the fact that Tinubu would be visiting Dubai at the end of this month to attend the Convention on Climate Change (COP28) edition, saying the President’s visit “ is going to be something great for us”.