President Bola Tinubu may bar revenue-generating agencies from collecting revenues on behalf of the Federal Government as he plans to introduce a single agency – Nigeria Revenue Service – to handle the task.
This came as the Federal Government instituted a comprehensive set of fresh tax reforms aimed at significantly boosting revenue collection.
The reforms, designed to enhance the efficiency of collecting direct taxes, along with various levies that are imposed on behalf of the government, will bar the Nigerian Customs Service, Nigerian Ports Authority, and 60 other revenue collection agencies from participating in revenue collection activities, but will lead to the creation of the Nigeria Revenue Service.
By implementing these changes, the government seeks to streamline the tax collection process, ensuring that all taxable entities contribute their fair share and that the revenue generated is maximised to support public services and infrastructure development.
The policy directive was instituted on Thursday when the President forwarded four executive bills to the National Assembly for consideration, aiming to implement significant tax reforms.
Nigeria is contending with a revenue challenge that cuts across all government tiers but wants to attain a minimum tax-to-GDP ratio of 18 per cent. The country’s tax-to-GDP ratio is below Africa’s average and ranks as one of the lowest in the world.
This has led to fiscal deficit and over-reliance on borrowing to finance public spending resulting in a cycle of inadequate funding for socio-economic development.