The Federal Government has agreed to look into claims of surrounding states losing revenues to the Federal Capital Territory, FCT, Abuja.
Minister of Finance, Mrs Kemi Adeosun made the offer yesterday when she received the Niger State Governor, Alhaji Mohammed Bello in her office in Abuja.
Adeosun lamented that losing N1 billion monthly to the FCT was a significant loss to the state governments, and assured that it was “genuine and regrettable mistakes that the Federal Government will try to rectify.”
Mrs Adeosun promised to refer the governor’s claims of a billion loss monthly to the Accountant General of the Federation (ÀGF) for reconciliation with the information provided by the state governments.
She said: “₦1 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.”
She was however quick to inform the governor that her office will only look at claims emanating from payrolls linked to the office of the AGF. The minister advised the governor to take claims from other government agencies such as the Central Bank of Nigeria (CBN), Federal Inland Revenue Service (FIRS) and diplomatic missions to these bodies for clarification.
Earlier, Bello had lamented that while the state generates ₦400 million monthly internally, “the amount being lost monthly by the state is over ₦1.3 billion which is over ₦15.3 billion every year. This could be used to improve the lives of Niger State residents in the areas of health care, education, water and social services and job creation.”
He reminded the minister that “under the Personal Income Tax Act, Section 41, taxes should be remitted to the state in which a person resides. This is known as 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 said the state has undertaken its research and presented claims for taxes deducted from salaries of civil servants, paid by the office of the Accountant General under the IPPIS, and wants these taxes remitted to the state government hence forth.
He also appealed to Mrs Adeosun to look into the issue of arrears as some residents have lived in Niger and worked in the FCT for over 10 years.
Bello equally pleaded with employers in the private sector especially banks, telecoms operators, consultants and construction companies and the diplomatic community to update their payroll records and ensure that taxes deducted from those resident in Niger State are remitted to Niger State government
The state’s Internal Revenue Services he said has been fortified and can issue both receipts and tax clearance certificates seamlessly.