President Bola Tinubu is set to reform Nigeria’s revenue collection system by barring over 60 revenue-generating agencies from collecting government revenues, including the Nigerian Customs Service and Nigerian Ports Authority. In their place, a new single entity, the Nigeria Revenue Service, will be created to handle all government revenue collections.
The move is part of broader tax reforms aimed at increasing revenue collection efficiency and achieving a minimum tax-to-GDP ratio of 18%, a significant improvement from the current low level. These reforms are expected to consolidate the government’s revenue collection efforts and boost public services and infrastructure funding.
Under the proposed plan, the Federal Inland Revenue Service (FIRS) will be renamed the Nigeria Revenue Service, focusing on assessing, collecting, and accounting for government revenues. Other agencies, such as the Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigeria Customs Service (NCS), will shift their focus to their core mandates, like trade facilitation and anti-smuggling operations, while no longer handling revenue collection.
This policy was introduced on Thursday as President Tinubu submitted four executive bills to the National Assembly, including the Nigeria Revenue Service (Establishment) Bill. The bill seeks to repeal the Federal Inland Revenue Service Act and create a more unified and efficient framework for tax collection. Alongside the name change, Tinubu also proposed three additional tax reform bills aimed at streamlining fiscal policies and improving tax administration.
The reforms have stirred debate, with some industry experts criticizing the removal of revenue collection duties from agencies like Customs. Dr. Eugene Nweke, a former president of the National Association of Government Approved Freight Forwarders, argued that Customs globally are known for revenue collection, and outsourcing this function to a new body may not be efficient.
However, Tinubu’s administration maintains that the establishment of a single revenue body will enhance transparency, reduce redundancy, and better align Nigeria’s fiscal system with international best practices, such as those seen in the U.S. and U.K.
The proposed bills also include the creation of a Tax Tribunal and the Office of the Tax Ombudsman to resolve disputes arising from revenue collection, ensuring a fair and consistent legal framework for taxation in Nigeria.
As part of the new tax reforms, the government hopes to alleviate the tax burden on small businesses and vulnerable citizens while ensuring that wealthier individuals contribute their fair share, as recommended by the Presidential Fiscal Policy and Tax Reforms Committee, headed by Taiwo Oyedele.
The House of Representatives has confirmed receipt of the bills, and Speaker Tajudeen Abbas emphasized that the reforms are aligned with the administration’s goals of enhancing revenue generation and promoting economic growth. A debate on the bills’ general principles is expected to be scheduled soon.
