President Bola Tinubu is considering barring revenue-generating agencies from collecting government revenues directly, proposing the creation of a single agency, the Nigeria Revenue Service, to handle this responsibility.
This move comes as part of a broader tax reform initiative aimed at improving revenue collection efficiency. These reforms will remove revenue collection duties from agencies like the Nigerian Customs Service, Nigerian Ports Authority, and 60 others, consolidating these functions under the new Nigeria Revenue Service. This agency will be tasked with collecting all government revenues, similar to the models used in the US and UK. These reforms are designed to enhance tax collection efficiency, ensuring that all taxable entities pay their fair share to support public services and infrastructure development.
The plan is one of several major proposals sent to the National Assembly, including a bill to rename the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service. The bill, which was presented by the President in a letter read by Senate President Godswill Akpabio and House Speaker Tajudeen Abbas, seeks to repeal the existing FIRS Act and establish the new Nigeria Revenue Service, responsible for assessing, collecting, and accounting for government revenues.
In addition to this, three other tax reform bills were introduced, including the Nigeria Tax Bill, the Nigeria Tax Administration Bill, and the Joint Revenue Board Establishment Bill. These bills aim to create a consolidated fiscal framework, streamline tax administration, and establish a Tax Tribunal and Tax Ombudsman to resolve tax disputes.
Tinubu emphasized that these reforms would strengthen Nigeria’s fiscal institutions, improve transparency, and stimulate economic growth. The proposed reforms are designed to increase Nigeria’s tax-to-GDP ratio, which currently ranks among the lowest globally. The country’s reliance on borrowing to finance public spending has contributed to fiscal instability, making tax reforms essential for achieving long-term economic sustainability.
The reforms are based on recommendations from the Presidential Fiscal Policy and Tax Reforms Committee, chaired by Taiwo Oyedele, which advocates reducing the number of taxes from 62 to a maximum of nine. Oyedele noted that reforms should ease the tax burden on small businesses and vulnerable individuals while ensuring that wealthier citizens contribute their fair share.
However, the proposal has sparked debate, particularly among customs officials and industry stakeholders. Dr. Eugene Nweke, former National President of the National Association of Government Approved Freight Forwarders, criticized the plan, noting that customs agencies globally are known for revenue collection and warning that outsourcing this function could be problematic. Similarly, Taiwo Fatobilola, a public relations officer for the Association of Registered Freight Forwarders of Nigeria, expressed skepticism, arguing that the specialized training customs officers receive cannot easily be replicated.
Despite these concerns, the Nigerian government is moving forward with its plans, signaling a significant shift in how revenues will be collected and managed across the country.
