The Senate has set the stage for a possible restructuring of the FCT administration. UCHENNA AWOM writes that two bills that would drive the effort scaled the crucial second reading. What are the issues?
What is wrong with the present structure of the Federal Capital Territory (FCT)? This is a question that could be answered when the Senate resumes from their vacation.
Before the close of the session about four weeks ago, the Senate Committee on the Federal Capital Territory (FCT) chaired by Senator Smart Adeyemi successfully pushed through two bills that will kick start an unprecedented tinkering with administrative structure of Abuja not only as a seat of government also as the melting pot of the nation’s diverse population.
The Bills as tabled by the Senator are the FCT Board of Inland Revenue Service bill and the FCT Property Tax law.
As expected, the two bills were well received by the Senators, many of who expressed the need for FCT autonomy in terms of revenue generation.
Senators, serially spoke in favour. The consensus opinion among the lawmakers was that since the nation has nurtured the FCT from the scratch to the present level where it is now recognized as one of the most viable modern capital cities of the world, the city should have advanced to become self sustaining.
Presenting the lead debates, Senator Adeyemi succinctly declared that the main trust of the bills is to tax the rich to enhance the standards of living of the poor adding that is a way of addressing the “unacceptable unemployment ratio ravaging Nigeria’s economy”.
According to him, the FCT, as recognized by the Constitution, should not only operate as a pseudo-state but as a true centre of unity where every Nigerian should be proud to live in.
Continuing, he disclosed that findings have confirmed that 75 percent of taxes collected or collectible in Abuja are not remitted to government. The government he said was losing lots of revenue due to inadequate laws.
“Monies collected as taxes often ended in private pockets as there are no laws to regulate the collection of revenue in the FCT. About 75 to 85 per cent of all the taxes you see people collect in Abuja go to private pockets.
“That explains why it suits some senior staff of the FCT that we don’t have a board of internal revenue. So it pays them that this law is not passed.
“But when you have a board in place you can now sit down and articulate all the taxes and levies you are supposed to collect. ‘’
The Kogi State-born Senator also submitted that the Property tax is aimed at getting the wealthy people to contribute to the wellbeing of the masses as the proceeds would not only enhance delivery on government’s pro-people programmes, the agencies will also provide employment to the teeming populace.
“This bill is targeted at the high brow areas of Abuja. Let them pay because they can afford it. Let’s take from the rich people and provide for the poor.
“We are going to make sure that the proceeds coming from property tax will not be used to pay contractors constructing roads in Abuja.
“We are going to focus on development that will impact positively on the lives of the people of the FCT”, he said.
Section 2 and 3 of the FCT Inland Revenue Board bill indicates that the main objectives of the bill shall be to control and administer the different taxes and laws as specified from time to time by laws of the National Assembly made under the Government of Nigeria. While introducing the property tax bill titled: A Bill For An Act To Provide For Assessment, Levy And Collection Of Tax On Real Property In The Federal Capital Territory And Other Matters Connected Therewith, 2012, Senator Adeyemi highlighted that those the tax would target only designated areas of the FCT. Section 1 of the Property Tax indicates that (1) Subject to the provisions of this Act, there is imposed a tax known as the Property Tax payable on all real property situated in designated areas within the FCT.?
(2)??? The areas to which this Act shall apply are as specified under the first schedule to this Act. Exemptions to the tax according to the bill include: “Properties owned and occupied by a religious body and used exclusively for religious or congregational worship, religious education or similar purpose; Real property owned by any person and used as a non-profit making cemetery or burying ground, but where the cemetery or burying ground is not immediately required for the interment of the dead, it shall not be exempt from taxation hereunder until such time as the real property has been actually and required in good faith, and at least in part used, for the interment of the dead.”
However, the Deputy President of the Senate, Senator Ike Ekweremadu told the Senate that laws being considered in the Senate should provide checks to guard against abuses and sharp practices in government. He, however, advised against rigid provisions in the laws which could hamper the operations of the Tax Board.
“It’s our responsibility to legislate on taxes. However, we have to make sure they are flexible to allow the revenue board to determine rates that will be paid.
“The bills must be proactive enough and make it leak-proof so as to check any leakages of funds”.
Also Sen Atai Aidoko (ANPP, Kogi) in support said the passage of the bills would ensure that FCT becomes self funding rather than constituting a drain on the nation’s economy. He stated that the formation of FCT Tax Board and Inland Revenue Service would help the FCT to generate revenue for the development of infrastructure in the territory.
“With this bill, there will be enough funds to develop facilities in the satellite towns, thereby encouraging people to relocate and decongest the city centre,’’ he said.
In the same vein, Senate Committee Chairman on Public Accounts, Senator Ahmad Lawan who also supported the bill, however, urged that the government must however ensure that men and women of character and integrity were appointed to the Board of Internal Revenue when it finally takes off.
“Those who are going to collect the taxes and levies must be very honest and transparent people.
“There’s a need to make it impossible that exemptions are granted to some members of the public by the Minister”, he said.
Nonetheless, even as the bills seems to be well received in the chamber, yet a few Senators appeared to miss key points as raised during the lead presentation, thus they rose in stout opposition to their passage.
Two Senators, Ben Ayade and Joshua Dariye, opposed the bills. Both lawmakers said the passage of the bills could further stretch the masses.
While Senator Ben Ayade said it would amount to imposing further burden on those he called the already “overburdened masses of Nigeria”, Senator Dariye said that any additional tax on the masses could serve as a disincentive for the people.
Ayade said: “Any additional tax on the people is not right because the revenue generated cannot be properly accounted for.
“All over the world it is known that the best way to improve on revenue is for you to diversify. The timing of the property tax is wrong.’’
The President of the Senate, Senator David Mark, however, identified with Ekweremadu when he said that the bills be referred to relevant Committees for further legislative action, including public hearings.
He directed that efforts must be made by the Committees to ensure that they block all areas of financial leakages in government revenue.
Reacting to some issues raised by his colleagues during the debate, Senator Adeyemi said that some Senators were sceptical about the utilization of the funds to be generated by the Tax Board and the Board of Internal Revenue. “They expressed fears that the funds may not be deployed to solve the problems of the poor communities or that the funds could just be left in the banks to shore up their capital”.
The Senate, he stated, would listen to all opinions during the public hearing and ensure that the interests of the masses are safeguarded.
“The principal aim of setting up the Tax Board and the Inland Revenue service is to help the poor through the resources of the rich. The two agencies to be created will also be self sustaining apart from making revenue for the FCT. The bodies will take care of more than ten revenue generation sources which are left untapped at the moment besides providing jobs for the unemployed,” he said.
The good news is that, the two bills have passed the crucial second reading on the Senate’s floor.
There are strong indications that the committee and its chairman have mounted strong and effective lobby of the House of Representatives Committee on FCT, which has also introduced the same bill.
That being the case, then it is expected that the two chambers would fast track the passage of the land mark bills capable of restructuring the FCT from a mere revenue gulping capital federal capital to a self sustaining modern city which not only earns its own bills but also contribute considerably to the national purse.
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