All revenue generating agencies will henceforth earn one percent on the revenue they generate if the Federal Government approve the slash in the cost of collection proposal by the Presidential Fiscal Policy and Tax Reform Committee.
The agencies that will be affected most are: the Federal Inland Revenue Service (FIRS), which receives four percent as cost of collection; Nigeria Customs Service (NCS) seven percent and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) five percent.
Mr. Taiwo Oyedele, the chairman of the Presidential Fiscal Policy and Tax Reform Committee, made this known in Abuja yesterday at a public consultation workshop for reporters and public commentators.
Oyedele stressed the need to cut the cost of revenue collection to one per cent aligning with international best practices.
The prevailing costs of collection in Nigeria range from per cent to over 30 per cent.
Oyedele said: “If an agency cannot collect revenue at one per cent, it should not be collecting it at all. This reform aims at ensuring that the government agencies focus on their primary functions rather than duplicating tax collection efforts.
“We are serious with the one per cent and it should cut across everybody, if you cannot collect revenue with one per cent, then you should not be collecting it at all that’s why we were saying let government agencies focus on the primary reason they were set up for.
“If they are not set up to collect tax they can’t be efficient and competent in doing it, things will work better if everybody plays to their strength there’s a reason why every country has their revenue collection agency and not to replicate that function and be expecting that everything will be fine. A country like South Africa is under one percent.”
The committee, Oyedele said, also plans to transform the Federation Account Allocation Committee (FAAC) disbursement process.
The panel is recommended that the disbursements to the three tiers of government process be changed from monthly to daily.
Presently, FAAC meets monthly to share money from the Federation Accounts to the federal, states and local government areas.
Oyedele, who described the method as archaic similar to 1814 practices, said: “We believe the system can be configured to credit the accounts of local, state, and federal governments daily.
