JUST IN: FIRS more suited to collect revenues — Presidential c’ttee

The Presidential Committee on Tax Policy and Fiscal Reforms said yesterday that the Nigeria Customs Service and 62 other Ministries, Departments and Agencies, MDAs, of the Federal Government should not collect revenue directly.

Recall that the committee, headed by tax expert, Taiwo Oyedele, was inaugurated on Tuesday by President Bola Tinubu in Abuja.

Oyedele, who stated this on Channels Television’s breakfast programme, Sunrise Daily, said the Federal Inland Revenue Service, FIRS, was best suited to collect revenue for the MDAs.

He said Nigeria’s revenue collection from taxes remained one of the lowest in the world, even as the cost of collection was high.

“Ironically, our cost of collection is one of the highest. And the reason for that is that we’ve got all manners of agencies. The Federal Government alone, we have 63 MDAs that were given revenue targets last year, no; actually in the 2023 budget.

“Two things that would come up from that: on one hand, these agencies are being distracted from doing their primary function which is to facilitate the economy. Number two, they were not set up to collect revenue, so, they won’t be able to collect revenue efficiently.

“So, move those revenue collection function to the FIRS. It has two advantages: the cost of collection and efficiency will improve, these guys will focus on their work, and the economy will benefit as a result.

“If you are Customs, focus on trade facilitation, border protection and if you are NCC (Nigerian Communications Commission), just regulate telecommunications. You are not set up to collect revenue.

“It can be your revenue and someone else can collect it for you. There will be more transparency because you see what is being collected and is accounted for properly.

”It is also a way of holding ourselves to account as to how we spend the money we collect from the people,” Oyedele said.

He said also there would be pushbacks from stakeholders and others benefitting from the process but noted that the committee’s sole objective was not to take what belongs to anyone but what should come to the government.

Oyedele also described the Treasury Single Account, TSA, initiative as a step in the right direction but noted it had not been fully developed.

According to him, TSA will help the committee’s work but there are more to do to maximise the initiative.

He also said the presidential committee would look into excess bank charges, noting that businesses pay as high as 65 to 70 levies and taxes.

He, however, said the committee’s plan was to reduce the number of taxes to about 10.

N20trn Tax Gap

While noting that as many members of the elite evade paying the exact taxes to government, Oyedele said: “As of today, we have significant tax gap estimated in the region of N20 trillion or even more.

”If you focus more on the few major taxes, such as Value Added Tax, Corporate Income Tax, Personal Income Tax, a lot of people are not (tax) compliant, particularly the middle class and the elite, some of them are in the tax net with one or two fingers, you pay a thousand naira as tax when you should have paid N10m,” he said.

He said all of the revenue not captured before would be brought into the tax net.

“In fact, our plan is to repeal many of the taxes that currently make doing business difficult without introducing new ones and yet collect more,” he said.

Recommends susension of VAT on diesel

Oyedele also said the Value Added Tax, VAT, on Automotive Gas Oil, also known as diesel, should be suspended.

According to him, the suspension of VAT on diesel will cushion the harsh economic effects of the fuel subsidy removal by the federal government.

He said: “What the President wants us to do is that within the first 30 days, there are those low-hanging fruits that people have generally agreed that this is a problem but nobody has done anything about it.

“Personally, for example, this is not promising that it would be done, but I think we should suspend VAT on diesel because we removed fuel subsidy on petrol and prices are going up.

“We are going to table it before the committee. These are the things we want to do in the first 30 days.”