ABUJA residents woke up to a mind-boggling reality yesterday, as the powers behind the Federal Capital Territory Administration, popularly referred to as the FCTA, exercised their power, by sealing off the Federal Inland Revenue Service, FIRS, head office in Abuja, over the non-payment of ground rent, spanning 25 years. Yes, you read it right, non payment of ground rent for 25years.
If we go by the clean hands doctrine, which is based on the maxim of equity, and which says that, one who comes into equity must come with clean hands, the authorities at the FIRS must be in absolute discomfort with their conscience, from yesterday till now, I guess. If the matter were to go to court, by the position of this doctrine, the court would deny the FIRS any equitable relief they demand, because they have violated the meaning of good faith, with respect to the subject of the claim.
By definition, tax is a compulsory contribution to state revenue, levied by the government on workers’ income and business profits, or added to the cost of some goods, services, and transactions. By law, the FIRS was established to manage the financial provisions of tax and other provisions guiding the inland revenue of the country.
In short, the core functions of the FIRS are to assess, collect, remit and account for the Federations taxes. But alas, from what happened yesterday in Abuja, they were caught doing the reverse. Instead of being a tax obligator, the FIRS was sealed off for being a tax obliterator. They were targeted by the FCTA officials, and publically termed, tax defaulters.
In the days when I was on full time job, the end of the month was a period I looked forward to with anxiety, not just because of the coming of salary, but because of an ugly provision in the content of the salary slip, that says, Personal Income Tax, or PIT. In Nigeria, personal income tax is calculated based on one’s total, or worldwide annual income.
The tax includes any income from employment or unemployment sources like salaries, wages, bonuses, benefits, and other earnings. To make matters worse, the tax system in Nigeria is progressive, meaning higher income levels are taxed at higher rates. In other words, the higher your income, the higher your “wahala” from the tax collectors-the FIRS.
A visit to the website of the FIRS says there is even a penalty for the late payment of tax, particularly with regards to what they call, the Corporate Income Tax, CIT. The website says, the penalty for late filing: ₦5,000 for the first month and ₦5,000 for each subsequent month of default as contained in Section 41 of PITA. Penalty for non-payment: 10% per annum of the tax payable, plus interest at the commercial rate. But yet, FIRS went napping for 25years without meeting the obligation that is central to its existence.
Although yesterday’s action of the FCTA officials went beyond the FIRS, as banks and the PDP Headquarters were also sealed off, when the action is juxtaposed with the position of the actual job of the FIRS, the irony is absolutely eye catching. It comes with a paradox that relates to the famous saying, thus: “Rather go to bed supper less than rise in debt.” FIRS can not go about tormenting people and corporate organizations over the non-payment payment of tax, when in actual sense it is the biggest culprit in the crime.
Reports have it that respite came its way and others yesterday, after the President has had high-level meetings at the State House with those affected, including Zacch Adedeji, chairman of the FIRS. The President has graciously given the owners of the indebted properties in the FCT a 14-day extra period to settle the overdue ground rent and associated penalties.
If we go by the records of its yearly submissions, the FIRS has no moral right to default in rent remittance, because it is doing very well. It collected a record N21.6 trillion in revenue in 2024, a 76% increase from the N12.474 trillion generated in 2023. By its own submission, the FIRS said the growth was primarily driven by non-oil taxes.
It said, it targeted N10 trillion in 2024, but got more. It set another target of N19.4 trillion, but again it exceeded. It is aiming for an even higher target of N25.2 trillion for this year, the year 2025. Yet it is owing for 25 years. Nothing defines irony better than this: A revenue obligator has turned into a revenue obliterator.
- Ibrahim is Publicity Director for the All Progressives Congress (APC).
