In a recent interview on Channels Television’s Sunrise Daily breakfast program, Taiwo Oyedele, Chairman of the Committee and former Fiscal Policy Partner at PriceWaterhouseCoopers (PwC), has proposed a significant shift in Nigeria’s revenue collection strategy. Oyedele highlighted the Federal Inland Revenue Service (FIRS) as the optimal candidate for collecting revenue on behalf of Ministries, Departments, and Agencies (MDAs).
Oyedele emphasized that Nigeria’s tax revenue collection lags globally, while the associated cost remains alarmingly high. He pointed out that the country’s federal structure fosters inefficiencies, with numerous agencies burdened by revenue targets. Out of 63 MDAs allocated revenue targets in the 2023 budget, these agencies are simultaneously diverted from their core functions and ill-equipped to efficiently collect revenue.
The proposal to entrust revenue collection to the FIRS offers two critical advantages. First, it would drive down collection costs, promoting efficiency. Second, it would enable MDAs to refocus on their primary responsibilities, stimulating economic growth.
Oyedele, underlining the need for clarity in agencies’ roles, compared revenue collection to regulatory functions. For instance, Customs should concentrate on trade facilitation and border protection, while regulatory bodies like the Nigerian Communications Commission should solely manage telecommunications. By reallocating revenue collection duties to a central agency, Oyedele argued for heightened transparency and accountability in expenditure.
Acknowledging the expected pushback from stakeholders and beneficiaries of the current setup, Oyedele emphasized the committee’s objective is not to infringe upon vested interests but to streamline revenue collection in favor of the government.
The Chairman also commended the Treasury Single Account (TSA) initiative, viewing it as a positive step. However, he noted that further development is required to fully leverage its potential and enhance the committee’s efforts.
In a bid to reduce complexity, Oyedele’s committee intends to address excessive bank charges and trim down the tax burden. The goal is to consolidate numerous levies and taxes, reducing them from as many as 65-70 to around 10, simplifying the process for businesses and individuals alike.
Oyedele, appointed by President Bola Tinubu, further exposed a significant tax gap estimated at around N20 trillion. This shortfall is attributed to non-compliance, particularly among the middle class and elite. He expressed the committee’s commitment to expanding the tax net, aiming to repeal existing cumbersome taxes while enhancing revenue collection.
This proposed transformation of Nigeria’s revenue collection system, led by Oyedele’s committee, holds the promise of boosting efficiency, transparency, and accountability in the nation’s fiscal operations.
