Over 90 percent of residents of the Federal Capital Territory do not file their annual tax returns, the Internal Revenue Service (FCT-IRS) disclosed on Tuesday.
The Acting Executive Chairman of FCT-IRS, Haruna Abdullahi, who disclosed this in Abuja at a tax seminar on the theme; “Reviving the Culture of Filing Tax’’, warned that culprits face serious sanctions.
The acting chairman, who noted that less than 10 percent of registered taxpayers were compliant, said the service was working with relevant authorities to enforce compliance.
“From our records, the number of taxpayers under the Pay As You Earn (PAYE) scheme is about 120,000.
“Half the figure comprises staff of Federal Ministries, Departments and Agencies (MDAs) on the Integrated Personnel Payroll Information System (IPPIS) platform, those working for Federal Capital Territory Administration (FCTA) and the Area Councils.
“The average number of Taxpayers outside those remitting through the PAYE scheme has remained in the region of 4,000 with a significant percentage of stop filers,’’ he said.
Abdullahi also warned tax advisors to distance themselves from those who engage in unethical conduct and routinely encourage tax agents to doctor records.
He said besides doctoring records, some tax agents do conceal documents required to arrive at a fair assessment of tax due to the government.
The FCT-IRS boss also expressed concern over the engagement of unprofessional consultants by some taxpayers to prepare and file returns with seemingly wealthy individuals.
Some of the consultants, he said, encourage wealthy Nigerians to file as low as annual income of N1 million to N2 billion.
The FCT-IRS boss said the service would continue to probe the activities of these agents and consultants and bring culprits to book.
The service, he said, embarked on its maiden back-duty audit in 2020 by engaging about 65 consultants, while some 900 tax agents were also audited.
Oe~n the theme of the workshop, the FCT-IRS boss said three major issues would be derived from it to ensure improved filing of tax returns.
He said a number of topics focusing on important issues under the theme are yet to be fully treated, including managing delinquent and recalcitrant taxpayers, beyond enforcement and digital transformation roadmap for enhancing tax compliance.
On the amount of revenue generated over the years by the service, Abdullahi said it had improved from N48 billion it inherited to more than N100 billion in 2021.
Within the year, he said the service realised an additional N26 billion from recoveries of unremitted With-holding Taxes (WHT) to the government.
He said that the service planned to increase its collection to N150 billion in 2022 outside unremitted taxes and levies.
Abdullahi said that with the recovery of unremitted taxes and levies, the service hoped to generate a total of N200 billion in 2022, in line with the 20 percent registered Taxpayers in the territory.
With enhanced compliance by the remaining residents of the capital city, he said the service would be able to generate between N300 billion and N400 billion.
Abdullahi said there would be room for high employment, low income reduction and enhanced services for residents if the target was achieved.
On efforts to ensure seamless collection of taxes in the FCT, Abdullahi said the service had leveraged on the gains of Information Technology (IT) and other avenues to realised its objectives.
Also, he said the Service introduced the Key Account Managers (KAM) who follow up with taxpayers on one-on-one basis, adding that the Service equally provided a self-service portal for taxpayers to generate Taxpayer Identification Numbers (TIN).
Through the self-service portal, he said taxpayers are able to validate and verify TIN via USSD, mobile applications and the web.
“This has lessened the burden of going to tax offices AND reduced human error and processing timelines,’’ he said.
Abdullahi said before the enactment of the FCT-IRS Act in 2015, the assessment, collection and accounting of taxes were vested in the Federal Inland Revenue Service (FIRS).
However, at its inception in December 2017, the Service inherited about 10,000 records of individuals registered and issued TIN.
So far, he said the FCT-IRS has raised the figure of TINs issued from about 10,000 TINs to more than 1,200,000 TINs.
He called for concerted efforts to improve compliance with tax returns, while pledging that more awareness would be carried out by the service.
Meanwhile, the FCT Minister, Mohammed Bello, and FIRS chairman, Muhammad Nami who were both represented at the seminar, pledged support for improved revenue generation in the FCT.