The Presidential Fiscal Policy and Tax Reform Committee has proposed a slash in the cost of collection by revenue generating agencies of government to 1 percent.
Chairman of the Presidential Fiscal Policy and Tax Reform Committee, Mr Taiwo Oyedele who made the disclosure Monday in Abuja at a public consultation workshop for the media and public commentators said the reform is aimed at ensuring that the government agencies focus on their primary functions rather than duplicating tax collection efforts.
He said the need to cut the cost of revenue collection to one percent is in line with international best practices.
The Nigeria Customs Service (NCS), an organization with the statutory responsibility of facilitating trade receives 7 percent as cost of collection; the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) is entitled to 5 percent while the Federal Inland Revenue Service (FIRS) receives 4 percent.
According to Oyedele “If an agency cannot collect revenue at one per cent, it should not be collecting it at all.
“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,” Oyedele added.
In addressing duplication of taxes, the Taiwo Oyedele Committee is proposing the harmonisation of taxes and levies collectable by the three tiers of government into eight categories. They include income tax, property tax, Value Added Tax (VAT), customs duties, excise tax, stamp duties, special levy, and harmonised levy.
He emphasized on the need to do away with nuisance taxes with very low revenue yield, high cost of collection and ultimate burden on the poor and small businesses.
On the Federation Account Allocation Committee (FAAC) disbursement process, the committee recommended that the disbursements to the three tiers of government be transformed from monthly to daily.
The monthly FAAC meeting being practiced sees the sharing of revenue accrued to the Federation Accounts in the previous month distributed to the federal, states and local government areas, with some percentages added to the revenue producing states.
Oyedele described the method as archaic, “We believe the system can be configured to credit the accounts of local, state, and federal governments daily.”
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