FG Proposes Tax Reduction from 52 to 10 and Renames FIRS to Nigeria Revenue Service

With the aim of enhancing business facilitation, promoting transparency, and streamlining revenue collection, the Federal government has proposed a plan to decrease the existing 52 taxes to just 10. Alongside this, there is a proposal to rebrand the Federal Inland Revenue Service (FIRS) as the Nigeria Revenue Service (NRS), which will oversee and unify all tax collection efforts by the Federal government. These developments were revealed by Mr. Zacch Adedeji, the special adviser on revenue to President Tinubu, during his presentation at the virtual TOPAZ 88 lecture series titled "Revenue Challenges and Opportunities in Nigeria Today."

During the lecture, Mr. Adedeji expressed concern about the problem of multiple taxations, highlighting its negative impact on trust and compliance among taxpayers in the country. He emphasized that the current administration aims to alleviate the burden on the poor by targeting taxes on 'prosperity' and 'fruits' rather than 'seeds.'

Regarding the government's plans, Mr. Adedeji explained that they intend to form a tax committee in the near future. The committee's primary objective will be to simplify the tax system by reducing the number of taxes from 52 to 10. This decision comes as a response to the realization that excessive taxation has hindered compliance, making it difficult for taxpayers to adhere to the existing tax regulations.

Consolidating Tax Collection Agencies

Additionally, he raised concerns about government agencies that intertwine regulatory duties with revenue collection, a practice that falls outside their designated mandate. In his words, he said:

“What we want to do now is to ensure that regulators focus on regulations while agencies in charge of tax collections will collect. “

“For instance, the Nigerian Maritime Administration and Safety Agency (NIMASA) collect 3%  freight duty, but it is not their duty.”

“Their duty is to secure the waterways. The collection of freights is the sole responsibility of the Nigerian Ports Authority. This is the reason we have leakages because we don’t know how much we have”

The presidential adviser responsible for overseeing revenue matters highlighted the Federal Government's strategic intention to centralize revenue collection efforts under the Nigeria Revenue Service, a single government agency. The driving force behind this initiative is to eliminate duplication and establish a cohesive system where all taxes owed to the government are efficiently collected by one authoritative entity.

President Tinubu's administration is committed to reviewing complaints about multiple taxation and anti-investment inhibitions, as emphasized in his inauguration speech. The establishment of the Presidential committee on fiscal policy and tax reforms, chaired by PwC's Africa tax leader Mr. Taiwo Oyedele, marks a significant step towards achieving these objectives.

According to the Director-General of Nigeria Employers’ Consultative Association (NECA), Adeyemi-Smatt Oyerinde, businesses in Nigeria are currently burdened with over 50 different taxes and levies, both legal and illegal. The proposed reforms hold the promise of relieving this burden and ushering in a new era of efficient, transparent, and equitable taxation in Nigeria.