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HomeTop NewsNigeria's Presidential Committee urges revenue centralization for MDAs, focus on tax efficiency

Nigeria’s Presidential Committee urges revenue centralization for MDAs, focus on tax efficiency

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The Presidential Committee on Tax Policy and Fiscal Reforms has recommended a strategic overhaul of revenue collection practices within the Nigerian government, advocating for the Federal Inland Revenue Service (FIRS) to take on the role of revenue collection from 63 Ministries, Departments, and Agencies (MDAs), including the Nigeria Customs Service.

Speaking on Channels Television’s Sunrise Daily breakfast program, Committee Chairman Taiwo Oyedele emphasized that the prevailing approach to revenue collection within the MDAs is suboptimal, leading to inefficiencies and misallocation of resources.

Oyedele, an esteemed former Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), pointed out that despite Nigeria’s relatively low tax revenue collection compared to global standards, the associated cost of collection remains disproportionately high.

Oyedele commented, “We have 63 MDAs that were given revenue targets last year, and this duality poses dual problems: it distracts these agencies from their primary economic facilitation function, and they lack the inherent expertise for efficient revenue collection.

By shifting this revenue collection function to the FIRS, we can enhance cost-effectiveness and operational efficiency. This reallocation will enable these agencies to focus on their core responsibilities, fostering a more productive economy.”

Addressing concerns of transparency and accountability, Oyedele highlighted that the recommended transition would foster a clearer audit trail of collected revenues, strengthening fiscal oversight and encouraging judicious spending.

The proposed changes are likely to be met with resistance from various stakeholders who benefit from the current setup. However, Oyedele underscored that the committee’s intention is to optimize government revenue streams without infringing upon legitimate interests.

Discussing other strategic fiscal measures, Oyedele acknowledged the positive strides made by the Treasury Single Account (TSA) initiative, while highlighting its untapped potential. He outlined plans for the committee to assess and optimize the TSA to better align with its broader goals.

Furthermore, Oyedele indicated that the committee is focused on addressing excess bank charges, noting that simplifying the taxation structure is pivotal to enhancing the ease of doing business. The committee envisions streamlining the plethora of levies and taxes, potentially reducing the number from 65-70 to a more manageable figure of around 10.

On the issue of tax evasion, Oyedele disclosed that Nigeria’s tax gap is a substantial N20 trillion, primarily attributed to non-compliance among the middle class and elite. He affirmed the committee’s commitment to broadening the tax base and ensuring equitable revenue collection.

Oyedele emphasized that the committee’s objective is not only to improve revenue generation but also to alleviate the complexities faced by businesses while retaining fiscal prudence.

In essence, the Presidential Committee on Tax Policy and Fiscal Reforms is orchestrating a paradigm shift in Nigeria’s revenue collection strategy, aiming to enhance efficiency, transparency, and accountability in a concerted effort to steer the nation toward a more financially resilient and growth-oriented future.

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