Harmonisation of revenue, or tax collection in the Federal Capital Territory (FCT), has remained contentious with divergent voices. While some beneficiary area councils feel it’s better and easier to just relax and get revenue, one like the Municipal has always argued that it can generate and collect its revenue. BEN ADOGA examines these issues
Only recently, again, the FCT Administration (FCTA) organised a town hall meeting to cross the ‘t’s and dot the ‘i’s on earlier agreed tax harmonisation in the FCT.
The occasion, which took place in the Abuja Continental Hotel (formerly Sheraton Hotels and Towers), was very well-attended by stakeholders, including the six area council chairmen of the FCT.
Having brainstormed earlier in Osogbo, the Osun State capital on 12th of May, 2023 the outcome tagged the ‘Oshogbo Declaration’ was ratified on 21st June, 2023 at the FCDA Conference Hall with all six area council chairmen in attendance and major stakeholders, it was expected that the town hall meeting to finalise things was going to be a formality.
But rather, new issues are emerging that need attention before the take-off of the new tax policy.
From the traditional institution, the Ona of Abaji, HRH Adamu Baba Yunusa, the paramount ruler of Abuja, the first jab came through his representative, Alhaji Camal Adamu Garba. He warned that tax should have a human face. And that the government now takes pride in taxing everything and making it punitive, as even the poor are driven beyond limits in modern tax policies.
As if that was not enough, the Ona of Abaji gave a tall order when he suggested that while harmonising, the FCTA should bring into the harmonised tax net the Department of Road Transport Services (DRTS), popularly known as Vehicle Inspection Officers (VIOs), Abuja Environmental Protection Board (AEPB), and the Abuja Geographic Information System (AGIS) into the harmonised tax system.
This is a tall order indeed as these agencies and organisations remain the main source of IGR for the FCTA, which is different from the funds to be captured for sharing with the area councils.
It appears the intention is just to throw the spanner in the wheel of the policy.
During the technical session, AMAC chairman, Christopher Zaka Maikalangun, made a case for his tax agents to be incorporated into the new tax system. The tax boys are touts who are already terrorising residents and visitors on the streets of Abuja. They wield sticks, and clubs, and rudely harass motorists.
They also remove vehicle number plates and force their victims to pay any amount they want, most of the time un-receipted.
‘Tax boys’ are usually political hangers-on who form the foot soldiers of politicians. Though they constitute a drain in the finances of the area council, it’s the choice of chairmen to keep them or not. Political popularity is a function of the number of foot soldiers.
The leakages created by the lack of transparency and accountability of the touts and tax contractors make the job very lucrative. While the government loses revenue, the boys and contractors smile at the bank.
It appears the chairmen of area councils like the Abuja Municipal Area Council (AMAC) and Gwagwalada are having a rethink since they perceive that they can, on their own, generate enough revenue.
Recall that the then AMAC chairman, Abdullahi Adamu Candido, who later became FCTA Transportation Secretary, was in court over the same matter, and was perceived to be winning the case before he prevailed to withdraw and settle out of court.
His argument was that as a third-tier government, he could function independently. He noted that Section 2 of the 1999 Constitution says the FCT area councils should be treated as local governments, and therefore, in this regard, there are local governments.
AMAC is host to most businesses in the FCT, as well as almost all government functionaries, embassies, leading hospitality industries, and lots more.
Though the benefits of the harmonisation policy have been enumerated to include the elimination of touting in the nation’s capital, one of the remote reasons is why some touts would do everything to frustrate the policy.
That when the procedure becomes transparent, it would facilitate the ease of doing business.
With more taxable entities dragged into the tax net and with professionals with proven capacity manning the tax system, the government and indeed the area councils are bound to have more money to share.
But AMAC rather feels that the ‘democratisation’ of the revenue from what would have been theirs, if not shared, would be better for it and that by sharing, it was being short-changed.
However, the sharing formula takes cognisance of this as AMAC always gets the lion’s share, followed by the Gwagwalada Area Council.
Better still, if AMAC is still not satisfied with the existing sharing formula, it could have simply requested a better deal, rather than sponsoring disruption or throwing the spanner in the wheels, as it appears now.
In any case, all six area council chairmen signed the harmonisation document, otherwise known as the Osogbo Declaration.
The signatories are: Danladi Chiya, Chairman, Kwali Area Council; Abubakar Umar Abdullahi, chairman, Abaji Area Council; Christopher Zakka, chairman, Abuja Municipal Area Council; Dr. John S. Gabaya, chairman, Bwari Area Council; Abubakar Jinrin Giri, chairman, Gwagwalada Area Council and Abdullahi Suleiman, chairman, Kuje Area Council.
Other stakeholders who signed the harmonisation document were: Olusade Adesola, FCTA Permanent Secretary; Garduys Gamiys Bawa, FCT Solicitor–General, Ibrahim Abubakar Dantsoho, Secretary, Area Councils Services Secretariat, among others.
The issue of tax harmonisation in the FCT has come a long way, dating back to the era of former Kaduna State governor, Nasir el-Rufai.
The FCT–IRS Act was eventually passed in 2015 where Sections 45 and 46 established a Joint Tax Committee and spelled out the functions thereof.
Whether the implementation will take off soon as planned or not, only time will tell.
