Tinubu Plans To Bar Customs, NPA, Others From Revenue Collection

President Bola Tinubu is poised to implement significant changes in the revenue collection framework of the Federal Government, potentially barring revenue-generating agencies from collecting funds on behalf of the government.

The proposed reform includes the establishment of a single entity, the Nigeria Revenue Service, tasked with handling all revenue collection activities.

This development aligns with the Federal Government’s initiative to introduce comprehensive tax reforms aimed at significantly boosting revenue collection efficiency.

Under the new proposal, agencies such as the Nigerian Customs Service, Nigerian Ports Authority, and approximately 60 other revenue collection bodies will be prohibited from participating in revenue collection efforts. Instead, the newly created Nigeria Revenue Service will take on this critical responsibility.

By streamlining the tax collection process, the government aims to ensure that all taxable entities contribute their fair share, maximizing the revenue generated to support public services and infrastructure development.

This policy shift was officially initiated on Thursday when President Tinubu submitted four executive bills to the National Assembly for consideration.

Nigeria currently grapples with a revenue challenge affecting all levels of government, with a goal to achieve a minimum tax-to-GDP ratio of 18 percent.

The country’s tax-to-GDP ratio is notably below the African average and ranks among the lowest globally, contributing to ongoing fiscal deficits and a heavy reliance on borrowing to finance public expenditures.

One of the key proposals in the executive bills includes renaming the Federal Inland Revenue Service to the Nigeria Revenue Service.

However, sources within the Presidency who spoke with Punch clarified that the new legislation would not involve a merger of existing agencies but instead remove the revenue collection functions from these agencies, reallocating them to the Nigeria Revenue Service.

The source said, “There is no merger of agencies. The bill will only take the revenue collection arm of each agency involved and take it to the Nigerian Revenue Service.

“The plan is that the new revenue agency will be like the US or UK revenue agency that collects all government revenues while other revenue agencies like NIMASA, NPA, Customs, etc, will now focus on their core mandate, which is trade facilitation. There is no merger at all.”

The bill seeking the name change for FIRS was outlined in a letter read by Senate President, Godswill Akpabio, and the Speaker, House of Representatives, Tajudeen Abbas, during the plenary sessions.

The proposed law, titled the Nigeria Revenue Service (Establishment) Bill, seeks to repeal the Federal Inland Revenue Service (Establishment) Act, No. 13, 2007, and establish the Nigeria Revenue Service.

According to Tinubu, the new agency will be responsible for assessing, collecting, and accounting for revenue accruing to the government.

In addition to the name change, Tinubu submitted three other tax reform bills under the title, ‘Transmission of Fiscal Policy and Tax Reform Bills’ to the National Assembly.

The President also transmitted to the parliament the Joint Revenue Board Establishment Bill, which seeks to create a Tax Tribunal and a Tax Ombudsman.

He wrote, “The Nigeria Tax Bill: This bill seeks to provide a consolidated fiscal framework for taxation in the country.

“The Nigeria Tax Administration Bill: Aimed at offering a clear and concise legal framework, this bill will ensure the fair, consistent, and efficient administration of tax laws, facilitating ease of tax compliance, reducing disputes, and optimizing revenue collection.

“The Joint Revenue Board (Establishment) Bill: This proposal seeks to establish the Joint Revenue Board, the Tax Appeal Tribunal, and the Office of the Tax Ombudsman, which will work to harmonise, coordinate, and resolve disputes arising from revenue administration in Nigeria.”

Tinubu emphasised that the proposed tax bills would have far-reaching benefits for the country, promoting taxpayer compliance, strengthening fiscal institutions, and fostering a more effective and transparent fiscal regime.

“I am confident that the bills, when passed, will encourage investment, boost consumer spending, and stimulate Nigeria’s economic growth,” Tinubu stated.

On the floor of the House of Representatives, Speaker Abbas, confirmed receipt of the bills, stressing that they were designed in line with the objectives of the present administration.

He noted that when passed into law, the bills would encourage the growth and sustainability of the economy.

The House also consolidated six bills seeking the repeal of the Fiscal Responsibility Act, 2007 to enact the Fiscal Responsibility Bill, 2024.

The bill aims to ensure prudent management of the nation’s resources, long-term macroeconomic stability of the national economy, and greater accountability and transparency in fiscal operations within the medium-term fiscal policy framework.

Abbas, who presided over the plenary, urged the Committee on Rules and Business to set a date for debate on the general principles of the newly consolidated bills.