The Federal Government of Nigeria has announced a significant reform in tax collection by centralizing the task under the Federal Inland Revenue Service (FIRS), ending the practice of 62 other Ministries, Departments, and Agencies (MDAs) collecting taxes independently. This move is aimed at improving transparency, efficiency, and revenue collection.
The Chairman of the Presidential Committee on Tax and Fiscal Policy Reform, Taiwo Oyedele, explained that the current setup, where multiple MDAs collect taxes, has led to distractions from their primary functions and hindered their ability to meet revenue targets. Centralizing tax collection under the FIRS is expected to streamline the process, reduce costs, and allow MDAs to focus on their core functions.
The reform also aims to create a more harmonized and simplified tax system, with the goal of closing the significant tax gap estimated at around N20 trillion. The government plans to achieve this by repealing existing taxes that hinder business growth while avoiding the introduction of new burdensome taxes. The aim is to increase revenue collection without placing undue burden on the general population.
The move towards centralizing tax collection under a single agency is expected to enhance revenue generation, improve tax compliance, and contribute to the overall economic development of Nigeria.