The Senate yesterday passed a new law making tax compulsory for property owners in the Federal Capital Territory (FCT), with the exemption of property owned by churches and mosques.
Government is, however, exempted from the new property law which had been in the Senate since 2011 but was finally introduced in 2012. It was sponsored by the FCT Committee Chairman, Senator Smart Adeyemi.
Essentially, the bill provides for the establishment of the FCT Internal Revenue Service and other matters connected therewith and also makes provision for assessment, levying and collection of tax on real property within the FCT.
In Section 24, the board is empowered to “cause all taxable, real property in the FCT to be appraised at least once in every five years…” and “all taxable property must be appraised at its market value as of January 1 in the year of appraisal.”
The rate of assessment indicates that taxable real property in the FCT would attract the following rates: (a) Residential-0.1 per cent; (b) Commercial-0.2 per cent; (c) Recreational-0.1 per cent; (d) Government and governmental agencies-0.1 per cent and (e) Others-0.3 per cent.
The tax payable in respect of real property, the bill noted, is from and after January 1 and up to and including December 31 of each calendar year.
Section 24 (2), Sub Section 2 lists those exempted from property tax in the FCT. They are: property owned by religious bodies; cemetery, especially where it is non-profit making; parks or public square; the diplomatic community since they enjoy diplomatic immunity within the Diplomatic Immunities and Privileges Act; public library; palaces of recognised traditional rulers; non-governmental organisations offering social welfare service, buildings used for learning and education and also, those used solely for community games or sports.
Section 8 of the bill says the service shall have the power to “adopt measures to identify, trace, freeze, confiscate or seize the proceeds of tax fraud or evasion.
“The board shall establish and maintain a fund to be applied towards the discharge of its functions which shall consist of and to which shall credit-(1) an amount not more than 10 per cent of all revenue by the service in the preceding year as administrative charge or cost of collection,” the law states.
A new clause was introduced on imposition and administration of tax on real property. The clause relates to property tax, which is payable on all real property situated in designated areas within the FCT.
Speaking with newsmen after the passage of the bill into law, Adeyemi disclosed that being the first bill to be passed for the FCT, the board would help to complement revenue due the territory from the Federation Account.
Deputy Senate President, Ike Ekweremadu who presided over the passage, urged states of the federation to emulate the FCT in the drive for internally generated revenue. “This is one of the assignments we owe the FCT as their own House of Assembly.
“I would like to congratulate all of us on laying this foundation for increase in the revenue of the FCT. I believe that every government, state, local government and even the Federal Government must do everything possible to have alternative revenue sources.
“Although oil is good, we believe that if we have additional funds coming from some other sources, it will help us in great measures in meeting up with the expectations of the people. So, this bill is a step in the right direction by the FCT, which we recommend to every other level of government,” said Ekweremadu.