*MDAs To Concentrate On Core Regulatory, Supervisory Responsibilities
If the Federal Government under President Bola Ahmed Tinubu is able to muster the needed political will, the so-called juicy Ministries, Departments and Agencies, (MDAs) that have hitherto been the exclusive preserve of the highly connected individuals and politicians, both appointed and elected in the area of employment an pecuniary interests, would become less attractive.
This is because government is mulling plans for these agencies to hand over revenue collection to the Federal Inland Revenue Service (FIRS).
Before now, some of these agencies like the Nigerian Ports Authority, Joint Admissions and Matriculation Board, Nigeria Communications Commission, among others, have abandoned their regulatory and supervisory roles for revenue generation, the chunk of which allegedly finds their way into private pockets and vested interests.
This had been at the expense of growth and development as staff turnover in these agencies happen regularly since they are regarded as cash cow for the economy.
Even presently, the House of Representative’s committee investigating the activities of the Federal Character Commission (FCC) was told how the federal agency that is supposed to uphold the tenets of equity and fairness in government activities was allegededly involved in employment racketeering into some of these juicy agencies whereby despondent and unsuspecting Nigerians were allegedly made to part with millions of naira for employment into these agencies.
This is even amid the federal government’s claim of embargo on employment for some years now.
However, according to the Chairman of the Presidential Committee on Tax Policy and Fiscal Reforms, Taiwo Oyedele, while speaking on Channels Television’s Sunrise Daily breakfast programme on Wednesday, August 9, 2023, these agencies would be divested I these responsibilities that have cost the economy billions of naira, dye to sharp practices.
Oyedele, a former Fiscal Policy Partner and Africa Tax Leader at PriceWaterhouseCoopers (PwC), said Nigeria’s revenue collection from taxes is one of the lowest in the world but the cost of collection is high.
“Ironically, our cost of collection is one of the highest. And the reason for that is that we’ve got all manners of agencies. The Federal Government alone, we have 63 MDAs that were given revenue targets last year, no; actually in the 2023 budget,” he said.
“And two things that would come up from that: on one hand, these agencies are being distracted from doing their primary function which is to facilitate the economy. Number two, they were not set up to collect revenue, so, they won’t be able to collect revenue efficiently.
“So, move those revenue collection functions to the FIRS. It has two advantages: the cost of collection and efficiency will improve, these guys will focus on their work, and the economy will benefit as a result.”
Asked for clarity on his comments, Oyedele said, “If you are Customs, focus on trade facilitation, border protection and if you are NCC (Nigerian Communications Commission), just regulate telecommunications. You are not set up to collect revenue.
“It can be your revenue and someone else can collect it for you. There will be more transparency because you see what is being collected and is accounted for properly. It is also a way of holding ourselves to account as to how we spend the money we collect from the people.”
The committee chair said there will be pushback from stakeholders and others benefitting from the process but the committee’s sole objective is to not to take what belongs to anyone but what should come to the government.
Oyedele also described the Treasury Single Account (TSA) initiative as a step in the right direction but it has not been fully developed. He said the TSA will help his committee’s work but there is more to do to maximise the initiative.
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Furthermore, Oyedele also said the presidential committee would look into excess bank charges. He said businesses pay as high as 65 to 70 levies and taxes but the committee’s plan is to reduce the number of taxes to about 10.
Oyedele, chair of the committee inaugurated by President Bola Tinubu on Tuesday, said Nigeria’s tax gap is estimated at around N20trn as many members of the elite evade paying the exact taxes they should remit to the government.
“As of today, we have a significant tax gap estimated in the region of 20 trillion or even more naira. If you focus more on the few major taxes – Value Added Tax, Corporate Income Tax, Personal Income Tax, a lot of people are not (tax) compliant, particularly the middle class and the elite, some of them are in the tax net with one or two fingers, you pay a thousand naira as tax when you should have paid N10m,” he said.
The tax expert said all of the revenue not captured before would be brought into the tax net.
“In fact, our plan is to repeal many of the taxes that currently make doing business difficult without introducing new ones and yet collect more,” he said.