Tax Reform Committee Proposes Lower Fees for Tax Collectors, Daily Revenue Sharing for States

Nigeria’s Presidential Fiscal Policy and Tax Reforms Committee is proposing significant changes to tax collection. The Committee Chair, Taiwo Oyedele, called for a reduction in tax collection fees for firms and consultants, proposing a standardized 1% fee instead of the current high fees that can reach up to 35%.

Another proposal aims to improve efficiency by distributing tax revenue daily. Currently, states and local governments collect their share through the Federal Account Allocation Committee (FAAC) in monthly meetings. The Committee suggests eliminating these meetings and distributing revenue directly to each level of government on a daily basis.

The Committee also focused on simplifying tax compliance for businesses, particularly SMEs. Their withholding tax reforms have been approved and will reduce the tax burden. Additionally, the committee recommends replacing the Federal Inland Revenue Service (FIRS) with a National Revenue Service, reflecting its broader revenue collection responsibilities.

Source: Vanguard