BREAKING: Customs, 62 MDAs To Stop Direct Revenue Collection – Presidential Committee

BREAKING: Customs, 62 MDAs To Stop Direct Revenue Collection – Presidential Committee

The Nigeria Customs Service and 62 other governmental Ministries, Departments, and Agencies (MDAs) of the Federal Government will cease the direct collection of revenue, according to a statement from the Presidential Committee on Tax Policy and Fiscal Reforms…CONTINUE READING

Taiwo Oyedele, the Committee’s Chairman, conveyed on a television program that the Federal Inland Revenue Service (FIRS) will now handle revenue collection for these MDAs.

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Oyedele, a former Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), pointed out that Nigeria’s tax revenue collection ranks among the lowest globally, despite the high cost of collection. He emphasized that this situation is aggravated by the involvement of multiple agencies. He further explained that these MDAs, which were assigned revenue targets in the 2023 budget, should focus on their core functions rather than revenue collection. Thus, transferring the revenue collection responsibility to FIRS offers two main advantages: improved efficiency and reduced collection costs. This realignment will allow these agencies to concentrate on their designated tasks and stimulate economic growth.

In clarifying his remarks, Oyedele highlighted that agencies such as Customs and the Nigerian Communications Commission (NCC) should concentrate on their primary roles—trade facilitation and telecommunications regulation, respectively—rather than revenue collection. He proposed that the revenue collection function can be outsourced to FIRS, promoting transparency and accountability in the utilization of collected funds.

As the head of the committee established by President Bola Tinubu, Oyedele stated that Nigeria faces a significant tax gap, estimated at around N20 trillion, mainly due to tax evasion by elite individuals. Oyedele underscored that a considerable number of individuals within the middle class and elite categories are not tax compliant, leading to a situation where they pay substantially lower taxes than they should. He revealed that the committee’s plan includes bringing all previously uncaptured revenue sources into the tax net while also streamlining and repealing existing taxes to enhance business ease without introducing new levies.