A proposal from the Presidential Committee on Tax Policy and Fiscal Reforms has stirred debate in Nigeria’s private sector. The plan suggests centralizing revenue collection duties currently handled by various agencies, including the Nigeria Customs Service and the Nigeria Ports Authority, under the Federal Inland Revenue Service (FIRS).
Taiwo Oyedele, the committee’s chairman and a former tax expert at PriceWaterhouseCoopers, believes that the majority of these agencies were not primarily established for revenue collection. Transferring this responsibility to the FIRS could result in cost savings and increased efficiency. Oyedele emphasized that many of these agencies should focus on their primary roles, such as border protection for Customs and telecommunications regulation for the Nigerian Communications Commission. He also suggested that a centralized system would improve transparency and accountability.
However, not everyone is on board with this idea. Olusola Obadimu, Director-General of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), raised concerns about the potential contradiction with existing revenue targets set for these agencies. He also questioned the government’s resolve to implement such a proposal, citing past unimplemented recommendations.
Gabriel Idahosa, Deputy-President of the Lagos Chamber of Commerce and Industry, viewed the proposal as potentially risky. He expressed fears that agencies stripped of their revenue-collecting duties might resort to tactics that could harm the country’s trade and economic activities. He stressed that the agencies with industry-specific knowledge would still need to play a role in the collection process.
The proposal, if implemented, would affect a host of agencies. A notable mention is the Nigeria Customs Service, which fell short of its N4.1tn target by collecting N2.6tn in 2022.
The debate continues as stakeholders discuss the feasibility and potential impact of the proposed shift in revenue collection responsibilities.
Stakeholders are offering mixed reactions to the proposal to centralize revenue collection duties under the Federal Inland Revenue Service (FIRS).
Mr. Wale Oyerinde, Director General of the Nigeria Employers’ Consultative Association, believes that clarity and proper framework from the government can prevent inter-agency rivalries. He argues that centralized collection, as seen in many developed countries, can streamline processes and enhance accountability.
Concurring with Oyerinde, the Chairman of the Nigerian Economic Summit Group, Mr. Niyi Yusuf, finds that having multiple agencies collect revenue leads to unnecessary complexity and conflicts of interest. Centralizing this duty would improve transparency and performance tracking.
However, Dr. Ikenna Nwaosu, a facilitator with the NESG, opposes the idea. He insists that modern revenue collection demands specialized training for different sectors. Contrary to the committee’s suggestion, he believes that the world has progressed past such a one-size-fits-all approach.
Abdullahi Maiwada, the National Public Relations Officer of the Nigeria Customs Service, declined to comment on the matter.
Dr. Muda Yusuf, CEO of the Center for the Promotion of Private Enterprise, advises caution. While he doesn’t foresee operational interference as an issue, he emphasizes the potential challenges of consolidating various agencies. A phased approach, testing the system with a few institutions before a full rollout, might prevent confusion.
Lastly, Prof Akpan Ekpo, an economist and former member of the Monetary Policy Committee of the Central Bank of Nigeria, supports centralized tax collection if backed by technology. However, he warns against imposing this system on state agencies due to Nigeria’s federal structure.