President Bola Tinubu is set to overhaul Nigeria’s revenue collection system by centralizing the process under a single entity, the Nigeria Revenue Service (NRS). This move aims to streamline tax and levy collection, eliminating the role of over 60 revenue-generating agencies, including the Nigerian Customs Service (NCS) and Nigerian Ports Authority (NPA), in collecting revenue for the Federal Government.
The proposed changes are part of a broader tax reform agenda designed to boost revenue efficiency and reduce Nigeria’s reliance on debt financing. With the new system, all taxable entities will contribute fairly, improving the government’s fiscal capacity to support public services and infrastructure development.
These reforms were presented to the National Assembly through four executive bills submitted by President Tinubu, including the Nigeria Revenue Service (Establishment) Bill, which will replace the Federal Inland Revenue Service (FIRS) with the NRS. Despite concerns about the implications, especially regarding the NCS’s traditional role in revenue collection, the Presidency clarified that the reforms would not merge agencies but rather reassign their revenue collection responsibilities.
Nigeria’s tax-to-GDP ratio remains one of the lowest in the world, and the government is targeting an 18% tax-to-GDP ratio to address fiscal deficits and reduce reliance on borrowing. The new system aligns with the recommendations from the Presidential Fiscal Policy and Tax Reforms Committee, which aims to reduce the number of taxes while shifting the burden away from small businesses and the poor.
Critics of the bill, including leaders from customs and freight forwarding associations, argue that revenue collection is a complex task requiring specialized training. However, the bill is seen as a crucial step in addressing inefficiencies in the current system and improving Nigeria’s overall economic outlook.
