From Uche Usim, Abuja
The Ministry of Finance has waded into the claims by some states that they are losing huge tax revenues amounting to N1 billion monthly to the Federal Capital Territory (FCT).
The affected state governors say the FCT administration taxes their people who work in Abuja, whereas they ought to pay tax where they reside and not where they work.
Consequently, the Minister of Finance, Mrs. Kemi Adeosun, has reached out to the affected states, with a view to resolving the matter.
Speaking when she received the Niger State Governor, Alhaji Mohammed Bello, in her office in Abuja yesterday, the Minister lamented that losing N1 billion monthly to the FCT was a significant loss to the state governments, adding that, “these are genuine and regrettable mistakes that the Federal Government will try to rectify.”
The Finance Minister said she will adequately address the Niger State Governor’s claims of a billion naira loss monthly to the Accountant General of the Federation (AGF) for reconciliation with the information provided by the state governments.
“N1 billion a month is a lot of money. However, this is not unique to Niger State and FCT; other states are experiencing the same thing. Taxes are paid where people reside and not where they work.”
However, the Finance Minister was quick to inform the Niger State Governor that her office will only look at claims emanating from payrolls linked to the office of the AGF, even as she directed the Governor to take claims from other government agencies like the Central Bank of Nigeria (CBN), Federal Inland Revenue Service (FIRS) and diplomatic missions to these bodies for clarification.
Earlier, the Niger State Governor lamented that while the state generates N400 million monthly internally, “the amount being lost monthly is over N1.3 billion, which is over N15.3 billion every year. This could be used to improve the lives of Niger State residents in the areas of healthcare, education, water and social services and job creation,” he said.
He reminded the Finance Minister that under the Personal Income Tax Act (PITA), Section 41, taxes ought to be remitted to the state in which a person resides under the Residency Rule.
“By remitting the taxes of Niger State residents to FCT, the hardworking residents of Niger State are being deprived of essential services such as schools, hospitals and good roads. As such, the funds available to Niger State government are incomplete and thus development needs cannot be met,” Bello told the Minister.