Banks To Start Demanding Proof Of Tax Payment From Abuja Residents As Wike Implements FCT Tax Law

 

The Federal Capital Territory (FCT) Administration, under the leadership of Nyesom Wike, has moved to strengthen tax compliance and revenue generation by going after tax defaulters in the federal capital.

The minister also gave a nod to FCTA’s implementation of Section 85 of the Personal Income Tax Act (PITA) and Section 31 of the FCT Internal Revenue Service Act, 2015.

This was revealed during a press conference by Chinedum Elechi, the Mandate Secretary of the Economic Planning, Revenue Generation, and Public-Private Partnership Secretariat.

According to Elechi, the sections provide that commercial banks and government agencies in Abuja, among others, must demand Tax Clearance Certificates (TCC) from individuals and organisations to allow them access to certain services.

He stated that the minister’s approval affects Federal Government Ministries, Departments, Agencies (MDAs), Commercial banks, and FCT Secretariats, Departments, and Agencies (SDAs), among others.

Elechi noted, “For purposes of emphasis, Section 85 of the Personal Income Tax Act, 2011 provides that MDAs or a Commercial Bank with whom any person has any dealing with respect to any of the specific transactions listed in that law shall demand from the person a tax clearance certificate (TCC) for the immediate past three years preceding the current year of assessment and shall also verify its authenticity by the issuing Tax Authority before carrying out any of those transactions.”

He warned that failure to adhere to the directive would attract penalties, including substantial fines and imprisonment.

“Section 85 of PITA also provides that for purposes of obtaining a TCC, any person who gives incorrect information or obtains a TCC through misrepresentation forgery, or falsification is guilty of an offence and liable on conviction to a fine of N50,000 (Fifty Thousand Naira only), plus twice the tax payable by him/her, or to imprisonment for three years or to both such fine and imprisonment. Similarly, a person, be it a government organization or corporate entity to whom Section 85 applies, who fails to demand for, or verify a TCC, is guilty of an offence and is liable on conviction to a fine of N5,000,000 (Five Million Naira Only), or to imprisonment for 3 years or both fine and imprisonment.

“In like manner, Section 31 of the FCT–IRS Act provides that the FCT SDAs, or officials of the FCTA, any official of the Area Councils, any corporate body or statutory authority or person empowered in that regard by the FCT-IRS Act or any other law, shall demand a TCC from any person (including natural persons, business name/enterprises, and other corporate entities), a TCC for the last three years immediately preceding the current year of assessment as a pre-condition for transacting any business in the FCT.

Elechi listed transactions set out in Section 31 of the FCT-IRS Act to include:

(a) application for Hon. Minister’s consent to real property transactions;
(b) application for Certificate of Occupancy;
(c) application for registration as a contractor;
(d) application for award of contracts by government, its agencies and registered companies;
(e) application for approval of building plans;
(f) application for any government licence or permit;
(g) any application relating to the establishment or conduct of business;
(h) application for FCTA loan for housing, business or any other purpose;
(i) registration of motor vehicles;
(j) registration of distributorship;
(k) confirmation of appointment by FCT as Chairman or Member of any public board, institution, commission, company or to any other similar position made by government;
(l) application for registration of a limited partnership;
(m) application for application of market stalls;
(n) appointment or election into public office; and
(o) any other application or process for which a tax clearance certificate is required under this Act or the Personal Income Tax Act.
Consequently, all MDAs, Commercial Banks and SDAs are required to:
(i) Demand TCC from all taxpayers before providing them with any services; and
(ii) Verify the authenticity of TCCs with FCT-IRS or other relevant Tax Authorities before providing service

LAGOSTREND MEDIA reported that President Bola Tinubu had given his approval for the exclusion of the Federal Capital Territory Administration (FCTA) from the Treasury Single Account (TSA), thereby granting the FCTA more control to use its Internally Generated Revenue (IGR) for project development.