· Performing SDAs to get 2.5% of earnings
· Plans to rival Lagos in disarray
Indications have emerged that the projected N200 billion internally generated revenue, IGR, set by the Federal Capital Territory Administration may not be realised after all, as its monthly IGR is still below expectations.
Tax authorities in the FCT had, in January 2022, set an ambitious N200 billion annual revenue target for the territory hoping to rival Lagos.
By this, the territory is expected to generate at least N16.6 billion every month. However, latest figures provided by the FCTA suggests that the administration now generates an average of N11.5 billion monthly.
Permanent Secretary of the FCTA, Mr. Olusade Adesola, had at the second edition of the FCTA Annual Staff Recognition Award, announced that revenues accruing to the administration leapt from a monthly average of N8.5 billion in 2021 to about N11.5 billion in 2022.
If its current N11.5billion monthly IGR figure is multiplied by 12 months, then the territory will generate about N138billion, leaving a deficit of N62 billion to meet its target.
A look into the FCT earnings in 2021 puts its IGR at N69.1 billion, which was the second-highest in the country.
Though IGR accruing to the FCTA coffers have risen by 26 percent monthly, the growth is still a far cry from the N200 billion target it hopes to achieve before the end of the year.
The permanent secretary while acknowledging the deficit said, “With our collective effort we have grown our IGR from the monthly average of N8.5billion in 2021 to about N11.5billion in 2022, but we have not yet attained our desired goal.
“Accordingly, we are exploring various initiatives to further grow the IGR. For instance, with effect from this year, we have introduced a financial reward for identified SDAs that contributed significantly to our revenue generation in the fiscal year 2021 will earn a 2.5percent share of their incremental revenue generation effort up to a cap of N10million.”
Minister of the territory, Mallam Muhammed Bello, in June, at the weekly State House Briefing organized by Presidential Communication Team at the State House, Abuja, said his administration will generate the N200 billion annually through aggressive revenue drive in the territory to beat Lagos as the highest revenue generating state in the country.
He said FCT had come up with a robust database of over a million residents and that the bulk of funds deployed in the administration of the territory came from internally generated revenue, unlike in previous years when it came from the Federation Account.
“But the point I was just trying to say is that the bulk of our funding that we now use to run the territory actually comes from our IGR. While in the formative years of the FCT, it used to be from federal allocation. But now, taking into account our budget for 2021, for instance, which was about N300 billion, you’ll find that the portion we got from the Federal Government was just about N50 billion. So you can find out that it’s not even up to 25 percent.
“So really the bulk of what we use now to run the territory comes from IGR. Going forward with our widening of the tax net, which I just mentioned to you and also our efforts in terms of improving online land retitling. These are all areas that are going to really beef up our IGR. And we have no option but to do that or else we really cannot be able to run the city and even to continue to build on infrastructure.”
Earlier, the minister had at a workshop for FCTA Revenue Desk Officers, disclosed that the administration would embark on an aggressive revenue drive in the territory.
The minister, who was represented by the FCTA Mandate Secretary in charge of Economic Planning, Revenue Generation, and Public-Private Partnership, Mr. Lukman Agboola, said the era of dependence on revenue from oil to fund the budget was over in the country.
He then vowed to activate the principles of revenue diversification in such a way that would put the FCT ahead of other states in IGR, especially Lagos.