Just In: With tax revenue gap of N20trn, Presidential Tax Committee strips Customs, NCC, 62 MDAs of revenue collection for govt

With Nigeria ranked as one of the lowest in revenue generation from tax collection, the newly-inaugurated Presidential Committee on Tax Policy and Fiscal Reforms is set to relieve the Nigeria Customs Service and 62 other Ministries, Departments and Agencies (MDAs) of collection of revenue for the government.

Mr Taiwo Oyedele, the Chairman of the committee while appearing on Channels Television breakfast program monitored by Persecondnews, ‘Sunrise Daily’, noted that the cost of collection of taxes is one of the highest in the world.

He, therefore, called for the harmonization of tax collection to aid in bridging the tax gap of N20 trillion in the country.

Oyedele disclosed that the Federal Inland Revenue Service (FIRS) will henceforth collect revenue for the MDAs, saying one of the advantages of the development is the cost of collection and that efficiency will improve.

He said: “Ironically, our cost of collection is one of the highest and the reason for that is that we have got all manners of agencies. The Federal Government alone have 63 MDAs that were given revenue targets last year, none actually did in the 2023 budget.

“And two things that would come up from that: on one hand, these agencies are being distracted from doing their primary function which is to facilitate the economy.

“Number two, they were not set up to collect revenue, so, they won’t be able to collect revenue efficiently.

“So, move those revenue collection functions to the FIRS. It has two advantages: the cost of collection and efficiency will improve, these guys will focus on their work, and the economy will benefit as a result.

“If you are Customs, focus on trade facilitation, border protection and if you are NCC (Nigerian Communications Commission), just regulate telecommunications. You are not set up to collect revenue.

“It can be your revenue and someone else can collect it for you. There will be more transparency because you see what is being collected and is accounted for properly. It is also a way of holding ourselves to account as to how we spend the money we collect from the people.”

Oyedele added:“As of today we have a significant tax gap estimated in the region of 20 trillion or even more naira. If you focus more on the few major taxes – Value Added Tax, Corporate Income Tax, Personal Income Tax, a lot of people are not (tax) compliant, particularly 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.”