TheCable

Wale Edun, minister of finance, says there is a need for a centralised revenue collection system.

Edun made the recommendation on Tuesday when he appeared before the house of representatives committee on finance to speak on the 2023 budget proposal.

Edun said the Federal Inland Revenue Service (FIRS) should be able to collect revenue on behalf of other government-owned enterprises, including the Nigeria Customs Service (NCS).

The minister’s recommendation followed a question posed by Oluwole Oke, a member of the committee from Osun, who asked if the FIRS and customs could be merged to collect revenue.

Edun said FIRS can collect revenue for other agencies,  saying it is an “innovation” that should be considered.

“In terms of the merger, what you are indicating and speaking to is the fact that revenue collection should be through a focal point,” he said.

“They can pay to a centralised point. The Federal Internal Revenue Service can collect on behalf of all the agencies. So these are the types of innovations, efficiencies and improvements that we must look at. 

“I am just agreeing wholeheartedly with you that given this day and age, technological advancement, and digital tools available, we really should be doing better in terms of revenue generation, collection and monitoring.”

TAX REBATE SHOULD REPLACE WAIVERS

The committee members criticised the current tax waiver system, arguing that it is not profitable to the government.

But Edun said the government is reviewing the policy and may replace it with a more efficient tax rebate.

“But the arrowhead for a really comprehensive analysis and cost-benefit analysis of those incentives and the spending on incentives, tax exemptions, duty waivers and so forth, are being done right now and we expect tremendous savings,” he said. 

“And in particular, we feel that a policy of rebate is probably better than upfront allocation of incentives.

“When the transaction is carried out, it is entirely feasible and practical and possible to immediately give somebody a rebate on funding that they have spent.

“It can be done seamlessly and with the technology these days, what could have been cumbersome in the past and taken too long and be self-defeating can now be done simultaneously so that if you pay your duty and you claim the rebate, immediately the transaction consummated and we see that you have actually imported the machinery you said you would import, you get your funds back. So that is the direction in which that is moving.”

FOREIGN RESERVE

Fielding questions on the status of Nigeria’s foreign reserve, Edun said the government is focusing on the “billions” in the hands of Nigerians.

The minister said there are billions of dollars outside the banking sector in Nigeria, adding that the new executive orders signed by President Bola Tinubu will allow these “billions” to flow into the banking sector.

“Foreign exchange held by Nigerians in cash outside the banking system is in the billions. And Mr President has authorized an executive order to facilitate the payment of that cash into the banking system, so it can form part of the money supply, so it can be of use to the Nigerian economy,” he said