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Tax review committee recommends Customs, FIRS merger to boost revenue generation,

by Business News Report

The National Tax Policy Review Committee has advised the Federal Government to merge Federal Inland Revenue Service and Nigeria Customs Service to improve revenue generation and accountability. The draft of the policy was presented at the committee’s second Stakeholders Engagement yesterday in Abuja by Mr Taiwo Oyedele, who is the West Africa Tax Leader at PricewaterhouseCoopers.
The National Tax Policy was first published in 2012 by the then Minister of Finance, Dr Ngozi Okonjo-Iweala, to entrench a robust and efficient tax system in Nigeria.
The recent committee was, however, set up by the Minister of Finance, Mrs Kemi Adeosun on August 10 to review the existing policy. Oyedele said the committee agreed that the current system promoted multitaxation, tax evasion and wastage.
“Part of our recommendation will be that FIRS and Customs should be merged; but not just them, but all revenue generating agencies at the federal level should be merged into one. What we have right now is not effective because it duplicates the collection mechanism. All the structures you have in FIRS is replicated in Customs, so cost of collection goes up.
“It also makes it easier for tax evaders to manipulate the system. You can provide information for customs and FIRS is not aware of it. So if you have one revenue agency, it will flag all the information about a tax payer when he or she is paying tax. It will also ensure that leakages in the system are reduced. This is why we are recommending merging, as part of the policy.

Oyedele said that the committee was also recommending that a Tax Amnesty Programme be introduced. He said that some companies or individuals might be afraid to join the tax network for fear of being asked to pay past tax liabilities. He said a tax amnesty would assure the public that past offences would be forgiven, thus enable government to expand the tax net.
Other key recommendations of the draft policy include establishment of Taxation Committee at national, state assemblies, administrative framework for amnesty and whistle blowing. The committee agreed that they were necessary to move Nigeria from its current position of 181 out of 189 countries to top 50 on the Ease of Paying Taxes World Report. The Chairman of the National Tax Policy Review Committee, Prof. Abiola Sanni, said that the need to improve revenue generation in the present economy would influence the decisions of the committee.
“Our ultimate goal is to have a revised document that is slim, simple and concise, a document which will impose duties and responsibilities on all organs of government.
“We envision a document that will eventually give a new lease of life to the Nigerian tax system and meet our taxation objective within the context of the peculiar Nigerian environment,’’ he said. Sanni said that the revised policy draft would be finalised at a retreat on Wednesday. He said the revised draft would be submitted to the Minister of Finance immediately, for onward submission to the Federal Executive Council for approval.

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