President Bola Tinubu may bar revenue generating agencies from collecting revenues on behalf of the Federal Government as he plans to introduce a single agency ‘Nigeria Revenue Service’ to handle the task.
This came as the Federal Government instituted a comprehensive set of fresh tax reforms aimed at significantly boosting revenue collection.
The reforms, designed to enhance the efficiency of collecting direct taxes, along with various levies that are imposed on behalf of the government, will bar the Nigerian Customs Service, Nigerian Ports Authority, and 60 other revenue collection agencies from participating in revenue collection activities, but will lead to the creation of the Nigeria Revenue Service.
By implementing these changes, the government seeks to streamline the tax collection process, ensuring that all taxable entities contribute their fair share and that the revenue generated is maximised to support public services and infrastructure development.
The policy directive was instituted via a four executive bill forwarded to the National Assembly on Thursday the 3rd of October, 2024, by the President for consideration, aiming to implement significant tax reforms.
Nigeria is contending with a revenue challenge that cuts across all government tiers but wants to attain a minimum tax-to-GDP ratio of 18 per cent. The country’s tax-to-GDP ratio is below Africa’s average and ranks as one of the lowest in the world.
This has led to fiscal deficit and over-reliance on borrowing to finance public spending resulting in a cycle of inadequate funding for socio-economic development.
One of the key proposals is the renaming of the Federal Inland Revenue Service to the Nigeria Revenue Service.
however, the new bill would not lead to a merger but seek removal of the revenue collection arm from the agencies and allocate its function to the Nigerian Revenue Services.
“There is no merger of agencies. The bill will only take the revenue collection arm of each agency involved and take it to the Nigerian Revenue Service,” the president said.
“The plan is that the new revenue agency will be like the US or UK revenue agency that collects all government revenues while other revenue agencies like NIMASA, NPA, Customs, etc, will now focus on their core mandate, which is trade facilitation. There is no merger at all”.
According to Tinubu, the new agency will be responsible for assessing, collecting, and accounting for revenue accruing to the government.
In addition to the name change, Tinubu submitted three other tax reform bills under the title, ‘Transmission of Fiscal Policy and Tax Reform Bills’ to the National Assembly.
“The Nigeria Tax Administration Bill: Aimed at offering a clear and concise legal framework, this bill will ensure the fair, consistent, and efficient administration of tax laws, facilitating ease of tax compliance, reducing disputes, and optimizing revenue collection”, He stated.
