The Chairman of the Presidential Committee on Tax Policy and Fiscal Reforms, Mr. Taiwo Oyedele, on Wednesday hinted that the Federal Government was making efforts to ensure that all federal taxes collected by the Federal Inland Revenue Service (FIRS) in furtherance of its current drives to improve the efficiency of tax administration in the country.
Oyedele, who made this disclosure during an interview with Channels TV, noted that the fiscal measure was partly informed by the need to reduce the cost of tax collection and improve revenue by plugging all areas of leakages.
The tax expert pointed out that currently Nigeria’s cost of tax collection remained one of the highest globally even when the value of generated revenue was not comparatively competitive.
He said: “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: in the 2023 budget.
“And 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 functions 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”, Oyedele added.
According to him, the move to make FIRS the sole agency for federal tax administration will make other agencies to focus on service delivery and less on raising revenue in line with their statutory mandates.
He expatiated: “If you are Customs, focus on trade facilitation, and 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 that that he expected the other agencies hitherto involved in tax collection and other stakeholders benefiting from the current regime would kick against the proposed reform, but insisted that the committee would stick to its stance as it related to the streamlining of the tax collection processes.
This is even as he disclosed that the presidential committee would look into excess bank charges with a view to ensuring that excessive charges on customers by lender’s are totally curbed.
On the tax gap in the economy, Oyedele pointed out that Nigeria currently had tax gap estimated at about N20 trillion and advised that all stakeholders in the economy should focus more on the few major tax sources, namely Value Added Tax (VAT), Corporate Income Tax (CIT), and Personal Income Tax (PIT) to improve the nation’s tax-to-GDP ratio.
He said: “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.
“In fact, we plan to repeal many of the taxes that currently make doing business difficult without introducing new ones and yet collect more”, the Committee Chairman assured.
