Tinubu’s New Policy To Limit Revenue Collection Powers Of Customs And NPA

Tinubu’s New Policy To Limit Revenue Collection Powers Of Customs And NPA....KINDLY READ THE FULL STORY HERE▶

President Bola Tinubu is considering a significant overhaul of Nigeria’s revenue collection system by prohibiting revenue-generating agencies from collecting funds on behalf of the Federal Government. Instead, he aims to establish a single entity, the Nigeria Revenue Service, to centralize this function. This proposal comes alongside a comprehensive set of new tax reforms designed to enhance revenue collection efficiency…….CONTINUE READING 

The reforms aim to streamline the collection of direct taxes and various government-imposed levies, thereby excluding the Nigerian Customs Service, the Nigerian Ports Authority, and approximately 60 other agencies from revenue collection activities. The establishment of the Nigeria Revenue Service is intended to ensure all taxable entities contribute fairly, maximizing revenue to support public services and infrastructure development.

The directive was introduced on Thursday when the President submitted four executive bills to the National Assembly for consideration, all aimed at implementing crucial tax reforms. Nigeria is grappling with a revenue challenge affecting all levels of government and is striving to achieve a minimum tax-to-GDP ratio of 18 percent. Currently, the country’s tax-to-GDP ratio is among the lowest in the world and below the African average, resulting in fiscal deficits and increased reliance on borrowing for public spending.

A key element of the proposed reforms is the renaming of the Federal Inland Revenue Service (FIRS) to the Nigeria Revenue Service. However, a source from the Presidency clarified that the bill would not merge existing agencies but rather transfer their revenue collection functions to the new agency. The goal is for the Nigeria Revenue Service to operate similarly to revenue agencies in the US and UK, allowing other agencies like the Nigeria Maritime Administration and Safety Agency (NIMASA) and the Nigerian Ports Authority to focus on their core mandates, such as trade facilitation.

The proposed Nigeria Revenue Service (Establishment) Bill aims to repeal the Federal Inland Revenue Service (Establishment) Act of 2007 and establish the new agency responsible for assessing, collecting, and accounting for government revenues. Alongside the name change, Tinubu introduced three additional tax reform bills under the title “Transmission of Fiscal Policy and Tax Reform Bills,” including a bill to establish a Joint Revenue Board and a Tax Tribunal.

Tinubu stated that the new legislation would provide a consolidated framework for taxation in Nigeria, promoting compliance, strengthening fiscal institutions, and enhancing transparency in fiscal operations. He expressed confidence that these bills would encourage investment, increase consumer spending, and stimulate economic growth in Nigeria.

The Speaker of the House of Representatives, Tajudeen Abbas, confirmed the receipt of these bills, emphasizing their alignment with the current administration’s objectives. The House also consolidated six bills aimed at repealing the Fiscal Responsibility Act of 2007 to enact the new Fiscal Responsibility Bill of 2024, which aims to ensure prudent resource management and greater accountability in fiscal operations.

These tax reforms are based on recommendations from Taiwo Oyedele’s Presidential Fiscal Policy and Tax Reforms Committee, which aims to reduce taxes from 62 to a maximum of nine. The recommendations also align with the President’s Policy Advisory Council, which suggested declaring a state of emergency on revenue generation.

Oyedele noted that the reforms aim to protect small businesses and vulnerable populations while ensuring that wealthier individuals are taxed appropriately. He emphasized the need for a new national fiscal policy that sets clear objectives for Nigeria’s economic future.

The proposed changes would transfer revenue collection responsibilities from 62 different agencies, including the Federal Airports Authority of Nigeria and the Nigeria Civil Aviation Authority, to the new Nigeria Revenue Service.

While some stakeholders have expressed concerns about the feasibility of this plan, arguing that customs agencies worldwide are recognized for revenue collection, officials from the Nigeria Customs Service stated they were unaware of the proposed bill.

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