The Presidential Committee on Fiscal Policy and Tax Reforms has proposed a significant overhaul in revenue collection processes. According to the committee’s chairman, Taiwo Oyedele, speaking on Wednesday’s edition of Sunrise Daily, a Channels Television program, the Nigeria Customs Service (NCS) and 62 other federal government ministries, departments, and agencies (MDAs) should discontinue direct revenue collection.

Oyedele, a former fiscal policy partner and Africa tax leader at PriceWaterhouseCoopers (PwC), emphasized that the Federal Inland Revenue Service (FIRS) is the most appropriate body to undertake revenue collection on behalf of the MDAs.

Highlighting a pertinent issue, Oyedele pointed out that despite Nigeria’s revenue collection from taxes being among the lowest globally, the associated cost of collection remains disproportionately high. This revelation underscores the urgency of streamlining and optimizing revenue collection mechanisms to ensure efficient utilization of resources.

The proposed shift towards centralized revenue collection by the FIRS is aimed at enhancing the effectiveness and efficiency of revenue generation, ultimately contributing to Nigeria’s financial sustainability and economic growth.

“Ironically, our cost of collection is one of the highest. And the reason for that is that we’ve got all manners of agencies. The Federal Government alone, we have 63 MDAs that were given revenue targets last year, no; actually in the 2023 budget,” he said.

“And two things that would come up from that: on one hand, these agencies are being distracted from doing their primary function which is to facilitate the economy. Number two, they were not set up to collect revenue, so, they won’t be able to collect revenue efficiently.

“So, move those revenue collection functions to the FIRS. It has two advantages: the cost of collection and efficiency will improve, these guys will focus on their work, and the economy will benefit as a result.

“If you are Customs, focus on trade facilitation, border protection and if you are Nigerian Communications Commission (NCC), just regulate telecommunications. You are not set up to collect revenue.

“It can be your revenue and someone else can collect it for you. There will be more transparency because you see what is being collected and is accounted for properly. It is also a way of holding ourselves to account as to how we spend the money we collect from the people.”

The committee, inaugurated by President Bola Tinubu on Tuesday, is tasked with delivering tax reforms achievable in 30 days.

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