President Bola Tinubu is poised to implement a significant overhaul of Nigeria’s revenue collection framework by banning agencies such as the Nigerian Customs Service and the Nigerian Ports Authority (NPA) from collecting federal revenues. Instead, these functions will be consolidated under a new entity known as the Nigeria Revenue Service, aimed at centralizing and streamlining revenue collection.
This initiative is part of a comprehensive tax reform strategy intended to enhance efficiency and maximize revenue generation for the federal government. Under the proposed policy, over 60 agencies previously involved in revenue collection will be restricted from these activities, allowing them to focus on their core mandates, such as trade facilitation and regulatory enforcement.
The reform agenda is detailed in a series of executive bills submitted to the National Assembly. One key proposal seeks to rename the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service, designating it as the sole authority responsible for the assessment, collection, and management of all federal revenues.
A presidential official clarified that there will be no merger of agencies; rather, the Nigeria Revenue Service will assume the revenue collection duties, allowing existing organizations like the Nigerian Maritime Administration and Safety Agency (NIMASA), NPA, and Customs to concentrate on their essential roles without the burden of revenue collection.
In addition to the creation of the Nigeria Revenue Service, the reform package proposes the establishment of a Tax Tribunal and a Tax Ombudsman. These entities are designed to enhance transparency, resolve tax disputes efficiently, and harmonize tax administration practices across the country.
Nigeria’s current tax-to-GDP ratio is among the lowest globally, significantly trailing behind the African average. The Tinubu administration aims to raise this ratio to a minimum of 18%, thereby reducing fiscal deficits and diminishing the country’s reliance on borrowing to fund public expenditures.
President Tinubu emphasized the importance of these tax reforms in strengthening fiscal institutions and promoting taxpayer compliance. He stated, “These changes are not merely administrative; they are foundational to building a more transparent fiscal regime that attracts investment, encourages consumer spending, and drives sustainable economic growth.”
As the government prepares for the legislative process surrounding these reforms, there is cautious optimism among economic analysts and stakeholders regarding the potential positive impacts on Nigeria’s fiscal health and economic landscape. The success of these measures will hinge on effective implementation and the cooperation of various government agencies and stakeholders involved in the transition to a centralized revenue collection system.
