In a bid to foster ease of doing business, transparency, and efficiency in revenue collection, the Nigerian Federal government has unveiled plans to significantly reduce the number of taxes from 52 to 10.
The announcement was made by Mr. Zacch Adedeji, President Tinubu’s special adviser on revenue, during the virtual TOPAZ 88 lecture series titled “Revenue Challenges and Opportunities in Nigeria Today.”
Mr. Adedeji emphasized that multiple taxations have led to reduced trust and compliance among taxpayers in the country.
He highlighted that the administration’s primary focus is to create an environment where the burden on the poor is alleviated, to tax ‘prosperity’ and ‘fruits’ instead of ‘seeds.’
Addressing the need for tax consolidation, Mr. Adedeji stated, “This is why, in the coming days when the tax committee is constituted, we will ensure that we streamline our taxes from 52 to 10 because we have realized that it is very difficult to have compliance due to so many taxes.”
One significant aspect of the proposed reform involves consolidating tax collection agencies. Mr. Adedeji pointed out that some government agencies are currently involved in both regulatory duties and revenue collection, which is not their designated mandate.
As part of the restructuring plan, regulatory bodies will focus solely on their designated regulations, while agencies specialized in tax collection will handle revenue collection tasks.
For example, Mr. Adedeji cited the Nigerian Maritime Administration and Safety Agency (NIMASA), which currently collects 3% freight duty, despite it not being within their primary duty.
The sole responsibility for freight collection lies with the Nigerian Ports Authority. Such practices have led to revenue leakages, as the government lacks clarity on the total amount collected.
In response to these issues, the Presidential adviser on revenue highlighted the government’s intention to consolidate revenue collection under one agency, the Nigeria Revenue Service.
The objective behind this initiative is to prevent duplication of efforts and ensure that all taxes due to the government are efficiently and comprehensively collected by a single entity.
These proposed tax reforms are expected to enhance revenue collection, encourage compliance, and promote a more business-friendly environment in Nigeria.
As the government works towards implementing these changes, stakeholders in the business community are closely monitoring developments to gauge the potential impact on economic growth and investment opportunities in the country.
Additionally, as part of the proposed reforms, the Federal Inland Revenue Service (FIRS) will be transformed into the Nigeria Revenue Service (NRS), unifying all tax collection activities of the Federal government.