The Federation Account Allocation Committee (FAAC) budget will now be disbursed daily, according to a proposal by the Presidential Fiscal Policy and Tax Reform Committee, which also suggests cutting tax collection expenses to 1%.
The committee’s chairman, Taiwo Oyedele, disclosed these recommendations to journalists during a recent public consultation session in Abuja.
According to Oyedele, the plans are essential to the committee’s plans to restructure the nation’s tax structure.
He emphasized that the current system needs to be updated because it is out of date and mentioned that the proposed reform will change the FAAC’s monthly allocation meetings to a daily payout plan.
The chairman of the committee also presented measures to simplify the tax code, cutting the total number of taxes to just seven: income tax, property tax, excise tax, value added tax (VAT), customs charges, stamp duties, and special levy.
He said: “Currently, Nigeria has about 60 different taxes and levies officially approved and over 200 unofficial levies across the country, which has increased business costs and adversely impacted the economy.
“The focus is to streamline them into a single digit, improving compliance and ease of tax payment. We believe the system can be configured to credit the accounts of local, state, and federal governments daily.”
He disclosed that the Accountant General of the Federation is among the important players that support the proposed reform. Oyedele underlined the necessity of addressing Nigeria’s collection costs, saying that an organization shouldn’t be collecting money at all if it can’t do so at a rate of one percent.
He mentioned that the nation’s typical collection costs range from four percent to more than thirty percent.
“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,” he said.