Customs, 62 MDAs to Stop Direct Revenue Collection, FIRS to Take Over, according to the Presidential Committee

The Nigeria Customs Service and 62 other Ministries, Departments, and Agencies (MDAs) of the Federal Government would cease Direct Revenue Collection, according to the Presidential Committee on Tax Policy and Fiscal Reforms.

The Federal Inland Revenue Service (FIRS) would now be in charge of collecting money for the MDAs, according to the Chairman of the Committee, Taiwo Oyedele, who appeared on Channels Television’s Sunrise Daily breakfast program on Wednesday.

Oyedele, a former Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), claimed that while Nigeria collects some of the lowest amounts of tax revenue globally, doing so comes at a great cost.

Ironically, one of the largest collecting costs is ours. And the fact that we have so many different agencies is the reason why. In the 2023 budget, not the previous year, 63 MDAs within the Federal Government alone received revenue targets, the official stated.

“And two things would follow from that: first, these agencies are diverted from carrying out their main duty, which is to support the economy. Second, they weren’t designed to generate income, thus they won’t be able to do it effectively.

Therefore, transfer those income collection tasks to the FIRS. It has two benefits: it will lower collection costs and increase efficiency, these people will concentrate on their work, and the economy will benefit.

If you are Customs, concentrate on trade facilitation and border protection, and if you are the Nigerian Communications Commission (NCC), only control telecoms, Oyedele remarked in response to a question about the specifics of his remarks. You’re not set up to make money.

It may be your income, and someone else could collect it on your behalf. Because you can see what is being collected and is properly accounted for, there will be more transparency. Additionally, it serves as a mechanism for holding us accountable for how we use the funds we receive from the public.

As many members of the wealthy avoid paying the precise taxes they should be sending to, according to Oyedele, chair of the committee launched by President Bola Tinubu on Tuesday, Nigeria’s tax shortfall is believed to be approximately N20 trillion.

“As of now, there is a large tax gap, which is estimated to be worth at least 20 trillion naira. Many people are not (tax) compliant, especially the middle class and the elite; some of them are in the tax net with one or two fingers; you pay a thousand naira as tax when you should have paid N10 million, he claimed. If you concentrate more on the few major taxes – Value Added Tax, Corporate Income Tax, and Personal Income Tax – you will find that this is the case.

All of the previously uncollected revenue, according to the tax expert, would be included in taxes.

“In fact, our plan is to repeal many of the taxes that currently make doing business difficult without introducing new ones and yet collect more,” he declared.

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