Nigeria to scrap roles of NUPRC, Customs, others in tax collection

Nigeria is aiming to end the collection of taxes paid to federal agencies such as Nigerian Upstream Regulatory Commission (NUPRC) and Nigerian Customs Service (NCS) in a new tax bill that is poised to increase government’s revenue.

Speaking during an interview on Channels Television Friday, Taiwo Oyedele, the chairman of the Presidential Tax Committee revealed that the tax reforms is billed to stop about 60 federal agencies from collecting taxes, allowing them to face their primary responsibilities.

“If you think about the Nigeria Upstream Regulatory Commission, for instance, they collect royalties from the oil companies. Royalty is a tax. So what they should do is regulate upstream activities, not collecting taxes, Oyedele said.

“Even Nigeria Custom services, they collect revenue relating to import duties, VAT, but they should focus on trade facilitation and border protections.

“We have over sixty agencies of the government at the federal level. And of course, a lot more than that, if you put all the states together, collecting taxes and levies. We do not know of any country where that is the case whether it’s in Africa or elsewhere. Why don’t you allow one agency collect taxes and levies? So that government agencies will focus on its primary mandate,” he added.

Oyedele said with the new tax bill which is still under consideration at the National Assembly, Nigeria’s tax collection will be simplified, enhancing the operational capacities of the agencies who are hitherto collecting them.

He further explained that the reform would ensure streamlining all federal tax payments to the Federal Inland Revenue Service (FIRS), which would mean changing its name to Nigerian Inland Revenue Service (NIRS).

With the new name and role, Oyedele stated that NIRS will then be responsible for the tax collection of all federal taxes, and some States taxes too.

“We have the Federal Inland Revenue Service (FIRS), but look at all the taxes they collect. They are shared by the federation. Actually, the FIRS is not the revenue agency of the federal government.

“It is the revenue agency of the federation. We thought an appropriate name will be Nigeria Revenue Service. We played around with federation revenue service, but it was looking too complicated,” he said.

Nigeria is faced with issues of tax collection and even multiple taxation which is hampering business growth and shrinking government’s revenue.

Africa’s most populous nation has one of the lowest tax-to-GDP ratio with a paltry 10 percent which is pushing the country to rely on borrowings to meet its financial obligations but the proposed tax bill is tapped to overhaul Nigeria’s tax system to ensure efficiency and block all leakages.