The Nigeria Customs Service and 62 other Federal Government Ministries, Departments, and Agencies (MDAs) will halt direct revenue collection, according to the Presidential Committee on Tax Policy and Fiscal Reforms.
The Federal Inland Revenue Service (FIRS) will now collect money for the MDAs, according to Committee Chairman Taiwo Oyedele, who spoke on Channels Television’s Sunrise Daily breakfast program on Wednesday.
Nigeria has one of the lowest tax revenue collections in the world, but the cost of collection is high, according to Oyedele, a former partner in fiscal policy and Africa tax leader at PriceWaterhouseCoopers (PwC).
Ironically, our collection fee is among the highest. We have a variety of agencies, which is why that is the case. We have 63 MDAs that were given revenue targets last year, but not in the 2023 budget, according to the federal government alone.
And two things would follow from that: first, these agencies are being prevented from carrying out their main responsibility, which is to support the economy. Second, they won’t be able to effectively collect revenue because they were not designed to do so.
Move the FIRS’ revenue collection function to them. It has two benefits: it will reduce collection and efficiency costs, allow these men to concentrate on their work, and boost the economy.
When asked for clarification on his remarks, Oyedele responded, “If you’re Customs, concentrate on trade facilitation, border protection, and if’s NCC (Nigerian Communications Commission), just control telecommunications.” You weren’t designed to make money.
“It might be your money, and someone else might take care of collecting it.” Because you can see what is being gathered and properly accounted for, there will be more transparency.
Additionally, it serves as a means of accountability for how we handle the funds we obtain from the public.
According to Oyedele, chair of the committee that President Bola Tinubu formally opened on Tuesday, Nigeria has a tax gap of about N20 trillion due to the elite’s propensity to avoid paying the correct taxes.
“A significant tax gap estimated to be in the 20 trillion or even more naira range as of today.” Many people, especially the middle class and the elite, are not (tax) compliant; some of them are in the tax net with one or two fingers, and you pay a thousand naira as tax when you should have paid N10 million, he said.
All of the previously uncollected revenue, according to the tax expert, will now be taxable.
Source: Channels TV