Presidential committee directs customs, 62 MDAs to transfer revenue collection to FIRS
The Presidential Committee on Tax Policy and Fiscal Reforms has directed the Nigeria Customs Service (NCS) alongside 62 federal government ministries, departments, and agencies (MDAs) to discontinue their direct revenue collection activities.Going forward, the Federal Inland Revenue Service (FIRS) will handle revenue collection on behalf of the MDAs.
Chairman of the committee, Taiwo Oyedele, highlighted the decision as a response to the current inefficient and costly revenue collection system.
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“Our cost of collection is one of the highest in the world due to various agencies involved in collecting revenue. With 63 MDAs alone within the Federal Government having revenue targets last year, we realized the need to streamline the process,” Oyedele explained.
The chairman stressed that the MDAs are not originally designed for revenue collection, and diverting their focus from their primary functions hampers their efficiency.
On the other hand, FIRS possesses the expertise and resources to handle revenue collection efficiently, making it a logical choice for the consolidation of these functions.
Oyedele also highlighted Nigeria’s estimated N20 trillion tax gap, emphasizing that the government has been missing out on significant tax revenue.
The committee has therefore committed to closing this gap by encouraging tax compliance among Nigerians, particularly in major tax categories such as Value Added Tax, Corporate Income Tax, and Personal Income Tax.
“As of today, we have a significant tax gap estimated at around 20 trillion naira or even more. Many individuals, particularly in the middle class and elite, are not fully tax compliant. Our focus will be on increasing awareness and ensuring proper tax inclusion,” Oyedele explained.
Furthermore, the committee aims to simplify tax laws and procedures, making it easier for Nigerians to comply. Oyedele emphasized their intention to repeal existing taxes that hinder business operations without imposing new burdensome ones, all while maximizing revenue collection.
“Our plan is to repeal many of the taxes that currently make doing business difficult without introducing new ones, and yet collect more,” said Oyedele.
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