President Bola Tinubu is considering prohibiting revenue-generating agencies from collecting funds on behalf of the Federal Government, as he aims to establish a single agency—the Nigeria Revenue Service—to manage this responsibility.
This move coincides with the Federal Government’s introduction of a comprehensive set of new tax reforms aimed at significantly enhancing revenue collection.
The reforms are intended to improve the efficiency of collecting direct taxes and various levies imposed on behalf of the government. As part of this initiative, the Nigerian Customs Service, the Nigerian Ports Authority, and 60 other revenue collection agencies will be barred from participating in revenue collection activities, leading to the establishment of the Nigeria Revenue Service.
Through 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 maximized to support public services and infrastructure development.
The policy directive was established on Thursday when the President submitted four executive bills to the National Assembly for consideration, with the goal of implementing significant tax reforms.
Nigeria is facing a revenue challenge that affects all levels of government and is striving to achieve a minimum tax-to-GDP ratio of 18 percent. Currently, the country’s tax-to-GDP ratio is below the African average and ranks among the lowest in the world.
This situation has contributed to fiscal deficits and an over-reliance on borrowing to finance public expenditures, creating a cycle of insufficient funding for socio-economic development.
One of the main proposals is to rename the Federal Inland Revenue Service as the Nigeria Revenue Service.
A source within the Presidency indicated that the new bill will not result in a merger of agencies. Instead, it aims to separate the revenue collection functions from the various agencies and assign those responsibilities to the Nigerian Revenue Service.
“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 official said.
The bill proposing the name change for the Federal Inland Revenue Service (FIRS) was presented in a letter read by Senate President Godswill Akpabio and House of Representatives Speaker Tajudeen Abbas during the plenary sessions.
The proposed legislation, titled the Nigeria Revenue Service (Establishment) Bill, aims to repeal the Federal Inland Revenue Service (Establishment) Act, No. 13 of 2007, and establish the Nigeria Revenue Service.
According to President Tinubu, the new agency will be tasked with assessing, collecting, and accounting for revenue that accrues to the government.
Alongside the name change, President Tinubu submitted three additional tax reform bills under the title “Transmission of Fiscal Policy and Tax Reform Bills” to the National Assembly.
Additionally, the President transmitted the Joint Revenue Board Establishment Bill to the parliament, which aims to establish 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 stressed that the proposed tax bills would yield significant benefits for the country by enhancing taxpayer compliance, strengthening fiscal institutions, and promoting 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 the receipt of the bills, emphasizing that they were crafted to align with the objectives of the current administration.
He highlighted that once enacted, the bills would promote economic growth and sustainability.
Additionally, the House consolidated six bills aimed at repealing the Fiscal Responsibility Act of 2007 to create the Fiscal Responsibility Bill, 2024.
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This bill seeks to ensure prudent management of the nation’s resources, promote long-term macroeconomic stability, and enhance accountability and transparency in fiscal operations within the framework of medium-term fiscal policy.
Presiding over the plenary, Abbas urged the Committee on Rules and Business to schedule a date for the debate on the general principles of the newly consolidated bills.
