Nigeria Plans to Reduce Revenue Collection Agencies and Simplify Tax System
The Nigerian Organised Private Sector has raised concerns about the burden of multiple taxation from various government entities. As a response, the government is considering a plan to shrink the number of revenue collection agencies to enhance ease of doing business and minimize tax leakages in the economy. Additionally, the Federal Inland Revenue Service (FIRS) is set to be rebranded as Nigeria Revenue Service (NRS) to streamline tax collection activities.
The Special Adviser to the President on Revenue matters, Zacch Adedeji, emphasized that the issue of multiple taxations has eroded trust and compliance among taxpayers in the country. The government aims to implement a taxation system that focuses on taxing ‘prosperity’ and ‘fruits’ rather than imposing heavy taxes on business ‘seeds’ at the outset.
To address the challenge of combining regulatory duties with revenue collection, the government plans to separate these roles. Regulators will concentrate on their regulatory functions, while designated tax agencies will solely handle revenue collection. This approach aims to plug tax leakages and ensure that the government has a clear picture of the total revenue generated.
The government intends to establish a tax committee to streamline the multitude of taxes, reducing them from 52 to 10. The objective is to simplify the tax system, as the current complexity makes compliance difficult for businesses. Additionally, the government plans to consolidate all revenue collection under a single agency, the Nigeria Revenue Service, to avoid duplication and enhance efficiency.
Opinion: Streamlining revenue collection agencies and simplifying the tax system in Nigeria is a crucial step towards improving the country’s business environment. By reducing the burden of multiple taxation and enhancing compliance, this initiative can stimulate economic growth, attract more investments, and promote transparency in tax collection. It is essential for the government to implement these reforms effectively to support businesses and foster sustainable development in the country.