Remit 10% proceeds from land sales to AIRS -- Head Capital Gains Tax urges
By Daniel Obagha :
Awka, Aug. 10, 2020 (MOI) Head of Capital Gains Tax (CGT), Anambra State Internal Revenue Service (AIRS), Mr Emeka Anyaneto, has appealed to citizens to remit 10 per cent of their gains from sale of lands to AIRS.
Anyaneto made the appeal during an interview with newsmen in his office at AIRS.
``The CGT is the gain on disposal of an asset. After deduction of the initial costs of the asset and agency fees, you remit 10 per cent of the remaining gain to AIRS.
``Assuming you have a plot of land you purchased at about N1, 000, 000 and you want to sell it for N1.5 million. The N500, 000, is your gain is where we are charging CGT,” he said.
Anyaneto urged buyers of lands to tell the seller to pay the capital gains tax so that they would not bear penalties for not paying it.
``Any time you want to buy a land, tell the seller to pay the CGT because if he fails to pay, we will come for you.
``If it is a limited liability company that is selling the land, they should remit to the Federal Government. But as an individual, you should remit to AIRS,” he explained.
The CGT Head noted that Capital Gains Tax is charged on the actual year basis.
``Another important thing about CGT is that it is charged on an actual year basis, meaning that if you sell today, you remit today or tomorrow.
``It is not like direct tax, where we charge on a preceding year basis. That is charging income for 2019 in 2020. CGT is on that particular year.”
He noted that one of the challenges they face in the course of their work was that people were not cooperating.
``A lack of information is our major challenge. People are not ready to tell us how much they have sold their lands.
``For instance, a hotel in Awka told us that they sold their land for N200, 000, 000 but the bank statement we got disclosed that the land was sold for N500,000,000.
``Others tell us that they inherited the land but after investigation, we find out that they actually purchased the land,” he lamented.
He said that Personal Income Tax Act (PITA) of Nigeria and Anambra State Tax Law, 2010 empowers them to mete out penalties on the defaulters.
``If you, the seller, fails to remit the CGT on the property, you sold, it accrues penalties over the years. And any day we find out, you will pay.
``We have more than 4,000 letters sent to defaulters. Owners of hotels are receiving our letters to provide us with information about the lands they sold or purchased.”
He adds: ``the law specifies that we get a Bench Warrant and Court Order to recover our money or go to the bank and block the person's account.
``We can go as far as ten, fifteen or twenty years to recover CGT from land sellers.’’
Anyaneto maintained that CGT department alone generated N64, 000, 000 to Anambra State Government in 2019 while from January 2020 to date; they generated N50, 000, 000 and targeting N200, 000, 000 before December. (MOI)