Dipo Olowookere
By Modupe Gbadeyanka
The merger of the Nigeria Customs Service (NCS) and the Federal Inland Revenue Service (FIRS) has been recommended by the National Tax Policy Review Committee to the Federal Government.
The Committee was inaugurated on August 10, 2016, by the Minister of Finance, Mrs Kemi Adeosun, to review and update the National Tax Policy (NTP) document, specifically to address areas of tax code and laws.
The 8-member Committee, headed by Prof Abiola Sanni, recommended that the two agencies be merged together for better efficiency.
Draft of the reviewed NTP was presented at the Committee’s second stakeholders’ engagement in Abuja on Tuesday by the West Africa Tax Leader at PricewaterhouseCoopers, Mr Taiwo Oyedele.
Mr Oyedele said it was discovered that the current system was encouraging multiple taxation, tax evasion and wastage, pointing out that both agencies perform duplicative functions.
It would be recalled that the NTP 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.
“Part of our recommendations will be that the FIRS and the 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 the FIRS are replicated in the Customs; so, the cost of collection goes up. It also makes it easier for tax evaders to manipulate the system. You can provide information for the Customs and the FIRS is not aware of it.
“So if you have one revenue agency, it will flag all the information about a taxpayer when he or she is paying tax. It will also ensure that leakages in the system are reduced. This is why we are recommending merger of the agencies as part of the policy,” Mr Oyedele said at the occasion.
According to him, the government should have a tax amnesty programme to widen the tax net, stressing that presently, some companies and individuals were not willing to join the tax system for fear of being asked to pay huge accumulated tax liabilities.
Mr Oyedele explained that with the tax amnesty programme, past tax offenders would be forgiven, thereby encouraging more firms and people to subscribe to the tax regime.
