Tinubu Proposes Nigeria Revenue Service to Replace Customs, NPA, 60 Other Agencies in Revenue Collection Overhaul

In a move to streamline revenue collection in Nigeria, President Bola Tinubu has proposed legislation that would bar key agencies, including the Nigerian Customs Service, the Nigerian Ports Authority (NPA), and over 60 other revenue-generating bodies, from collecting revenues on behalf of the Federal Government. Instead, he plans to establish a new entity, the Nigeria Revenue Service (NRS), tasked solely with revenue collection.

This proposal comes as part of a broader set of tax reforms aimed at enhancing the efficiency of revenue collection across the country. The reforms would centralize these functions under the NRS, ensuring that all taxable entities contribute fairly to the nation’s revenue, thereby supporting essential public services and infrastructure development.

On Thursday, President Tinubu submitted four executive bills to the National Assembly, outlining his plans for these tax reforms. The initiative is part of Nigeria’s efforts to address its persistent revenue challenges, which have resulted in a tax-to-GDP ratio significantly below the African average and among the lowest globally. Currently, Nigeria is striving to achieve a minimum tax-to-GDP ratio of 18%.

A source within the presidency clarified that the proposed legislation does not aim to merge existing agencies but rather to transfer the revenue collection responsibilities to the newly established NRS. This approach will allow agencies such as the Nigerian Customs Service and the Nigerian Ports Authority to focus on their core mandates, primarily trade facilitation.

The proposed changes include renaming the Federal Inland Revenue Service (FIRS) to the Nigeria Revenue Service, a move highlighted in a letter presented to the Senate by Senate President Godswill Akpabio and House of Representatives Speaker Tajudeen Abbas.

The Nigeria Revenue Service (Establishment) Bill aims to repeal the Federal Inland Revenue Service (Establishment) Act of 2007 and create the NRS, which will be responsible for assessing, collecting, and accounting for government revenues.

Additionally, Tinubu has introduced three other significant tax reform bills aimed at creating a more structured fiscal framework in Nigeria. These include the Nigeria Tax Bill, which seeks to consolidate taxation laws, the Nigeria Tax Administration Bill, which aims to clarify legal frameworks for tax administration, and the Joint Revenue Board (Establishment) Bill, which proposes the establishment of a Tax Tribunal and a Tax Ombudsman to harmonize revenue administration and resolve disputes.

Emphasizing the potential benefits of the proposed reforms, President Tinubu stated, “I am confident that the bills, when passed, will encourage investment, boost consumer spending, and stimulate Nigeria’s economic growth.” Speaker Abbas echoed this sentiment, affirming that the bills align with the administration’s objectives and will foster economic growth and sustainability.

The tax reforms align with recommendations from the Presidential Fiscal Policy and Tax Reforms Committee, chaired by Taiwo Oyedele, which advocates for a significant reduction in the number of tax types and promotes a more equitable taxation system. The proposed changes also address the need to protect small businesses and vulnerable populations while ensuring that wealthier individuals contribute appropriately.

As part of this initiative, the government plans to eliminate the revenue collection functions of various agencies, including the Federal Airports Authority of Nigeria, Nigerian Deposit Insurance Corporation, and others, transferring these responsibilities to the NRS.

However, reactions to the proposed changes have been mixed. Dr. Eugene Nweke, a former national president of the National Association of Government Approved Freight Forwarders, expressed concerns over the practicality of outsourcing revenue collection, emphasizing the specialized training required for Customs operations. Similarly, Taiwo Fatobilola, the National Public Relations Officer of the Association of Registered Freight Forwarders of Nigeria, criticized the proposal as unrealistic.

Conversely, Abdullahi Maiwada, the National Public Relations Officer of the Nigeria Customs Service, stated he was unaware of the new legislation.