• To stop Customs, NPA, others from revenue collection
• New initiative receives mixed reactions from stakeholders
Tayo Busayo
DAILY COURIER — In a bold move aimed at revitalizing Nigeria's revenue collection framework, President Bola Tinubu has proposed significant reforms that could reshape the landscape of tax administration in the country. The administration plans to establish a single agency, the Nigeria Revenue Service (NRS), which would take over the revenue collection duties currently managed by multiple agencies, including the Nigerian Customs Service and the Nigerian Ports Authority.
This announcement, made on Thursday when President Tinubu submitted four executive bills to the National Assembly, seeks to address the pressing need for an efficient and streamlined tax collection process in Nigeria. The proposed reforms aim to improve direct tax collection and the management of various levies imposed by the government, with the overarching goal of increasing the country’s tax-to-GDP ratio from its current levels, which are among the lowest in Africa.
"The new agency will serve as a central body for assessing, collecting, and accounting for government revenues, allowing other agencies to focus on their core mandates," said a source within the presidency. This plan has garnered attention due to the substantial number of existing revenue-generating agencies—over 60—that would be affected by the reforms.
The key proposal involves renaming the Federal Inland Revenue Service (FIRS) to the Nigeria Revenue Service, although officials have clarified that this will not constitute a merger of agencies. Instead, the focus will be on reallocating revenue collection responsibilities to the new agency, thereby enhancing accountability and operational efficiency.
During the plenary session in the National Assembly, Senate President Godswill Akpabio and House Speaker Tajudeen Abbas confirmed receipt of the bills, which they acknowledged are designed to align with the current administration's economic objectives. "These bills are not just administrative changes; they are part of a comprehensive strategy to boost Nigeria's fiscal health and stimulate economic growth," Abbas stated.
The proposed legislation comes at a critical time as Nigeria faces substantial revenue challenges, leading to increased fiscal deficits and reliance on borrowing. Tinubu's administration aims to achieve a minimum tax-to-GDP ratio of 18%, a target that underscores the urgency of tax reforms in the country.
In addition to the establishment of the NRS, Tinubu's reform package includes the Nigeria Tax Bill, which seeks to create a consolidated fiscal framework, and the Nigeria Tax Administration Bill, designed to ensure efficient tax law administration. The Joint Revenue Board Establishment Bill aims to create a Tax Tribunal and a Tax Ombudsman to oversee disputes arising from revenue collection and administration.
The reforms are informed by recommendations from the Presidential Fiscal Policy and Tax Reforms Committee, chaired by Taiwo Oyedele, which has advocated for reducing the tax burden on low-income individuals and small businesses while ensuring that wealthier citizens contribute fairly. "Our aim is to protect the vulnerable and small businesses, shifting the tax burden to those who can afford it," Oyedele explained in a recent interview.
However, the proposed changes have sparked debate within the industry. Dr. Eugene Nweke, former President of the National Association of Government Approved Freight Forwarders, expressed skepticism about the practicality of removing revenue collection from established agencies like Customs, which he noted have extensive experience in this area. "Revenue collection is complex and requires specialized knowledge," Nweke cautioned.
The response from within the Nigeria Customs Service has been mixed, with officials reportedly unaware of the specifics of the bill. National Public Relations Officer Abdullahi Maiwada stated, "I am not aware of that; I am just hearing it from you," highlighting potential communication gaps within the agency.
As the National Assembly prepares to debate these critical reforms, the implications of a centralized revenue collection system remain a hot topic. If successful, this initiative could not only enhance fiscal discipline but also transform Nigeria's economic landscape by increasing revenue for essential public services and infrastructure development. The proposed reforms represent a pivotal shift in Nigeria's approach to taxation and revenue generation, with the potential to set the stage for a more sustainable fiscal future.
