The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has said that no agency of the Federal Government has been stopped from collecting revenue as many of them are empowered to do so by law.
This is coming against the backdrop of earlier reports that as part of the tax reforms, the Federal Government plans to stop those agencies from revenue collection and move this function to the Federal Inland Revenue Service (FIRS) so that they can focus on their primary function.
This was made known by Oyedele through a series of posts on his official X (formerly Twitter) account while providing answers to Frequently Asked Questions on the goals and work done by the committee so far.
Oyedele, however, stated that the Federal Government intends to harmonize the fragmented revenue collection functions into one agency as many of these agencies would have to focus on their primary functions.
Improve efficiency
- When asked whether it is true that agencies with revenue collection functions will be stopped from collecting revenues and merged with the FIRS? Oyedele said, ‘’No agency has been stopped from collecting revenue as many of them are empowered to do so by law. However, many of the agencies would rather focus on their primary functions hence we intend to harmonise the fragmented revenue collection functions into one agency for each government.
- ‘’This is the case in many countries including the leading tax regimes in Africa. This reform will help to improve efficiency and enable the agencies to focus on their primary mandates for the overall benefit of the economy.’’
FG to reduce the number of taxes, levies
Oyedele also said that the Federal Government does not intend to introduce new taxes or impose higher tax rates but rather reduce the number of taxes and levies while harmonizing revenue collection to reduce the burden on people and businesses.
- He said, “We do not intend to introduce new taxes or impose higher tax rates. Rather, our mandate is to reduce the number of taxes and levies while harmonising revenue collection to reduce the burden on the people and businesses. The objective is to avoid taxing investment, capital, production or poverty. We plan to review and re-enact the major tax laws in a holistic manner thereby limiting the necessity for frequent changes through annual finance acts.”
- On achieving the 18% tax-to-GDP ratio mandated by the committee to improve the nation’s income generation within three years, Oyedele said, “The average tax-to-GDP ratio for Africa excluding Nigeria is about 18%. This is the basis for the target of 18% and the estimated tax gap of N20 trillion.”
- He added, “There is a huge opportunity to generate revenue by leveraging technology and tax intelligence to close the tax gap. In addition, we will rationalize incentives, reduce the cost of collection, and optimise revenue from government assets and natural resources. This way we can generate more revenue without introducing new taxes.”
He pointed out that the committee’s mandate is not limited to only the federal government but cut across all levels of government.
