Customs, 62 Other MDAs To Stop Direct Revenue Collection — Presidential Committee

The Presidential Committee on Tax Policy and Fiscal Reforms has announced that the Nigeria Customs Service and 62 other Ministries, Departments, and Agencies (MDAs) of the Federal Government will no longer directly collect revenue. Instead, the Federal Inland Revenue Service (FIRS) will assume responsibility for revenue collection for these entities.

Taiwo Oyedele, Chairman of the Committee and former Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), made this revelation during an interview on Channels Television’s Sunrise Daily breakfast program on Wednesday.

Oyedele explained that Nigeria’s tax revenue collection is hindered by a multitude of MDAs tasked with revenue targets, which ultimately distracts them from their core functions and raises the cost of collection. He emphasized that these agencies were not originally designed for efficient revenue collection and, as a result, the responsibility should be transferred to the FIRS.

“This shift has two advantages: it will improve the efficiency and cost of collection, allowing these agencies to focus on their primary functions, which will in turn benefit the economy,” Oyedele stated.

He clarified that these MDAs should focus on their core responsibilities, such as trade facilitation for Customs and telecommunications regulation for the Nigerian Communications Commission (NCC), rather than revenue collection.

The move aims to enhance transparency in revenue collection, ensure proper accountability for collected funds, and align each agency with its intended role. Oyedele also addressed Nigeria’s tax gap, which is estimated to be around N20 trillion due to widespread tax evasion, particularly among the middle class and elite individuals.

The committee also proposed the suspension of Value Added Tax (VAT) on diesel to mitigate the economic impact of the fuel subsidy removal. Oyedele noted that these changes are part of the committee’s broader plans to implement critical tax reforms, harmonize tax laws, issue executive orders, and roll out regulations within the next six months.

The Presidential Committee on Tax Policy and Fiscal Reforms, inaugurated by President Bola Ahmed Tinubu, has a one-year timeframe for policy implementation, with 30-day, six-month, and one-year phases running concurrently. The committee’s objective is to streamline tax-related processes, reduce the number of taxes levied on businesses, and ensure more efficient revenue collection through the FIRS.