The federal government has announced plans to halt the longstanding deductions for revenue collection costs paid to agencies such as the Federal Inland Revenue Service (FIRS), Nigerian Customs, and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, revealed this on Wednesday in Abuja during the launch of the National Development Update (NDU).
Edun noted that while gross government revenues are increasing, a significant portion is still being deducted by collecting agencies—without reflecting in national development. He emphasized that President Bola Tinubu has directed a comprehensive review of all deductions, not just those linked to revenue collection.
“Funds have flowed into the federation account, but efficiency in spending is critical,” Edun said. “We’ve been mandated to scrutinize all deductions, and during the last FAAC meeting, many of these were removed permanently.”
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The finance minister highlighted that this move aims to improve fiscal efficiency, boost transparency, and ensure more funds are available for national and subnational development.
According to the NDU report, capital expenditure by state governments has surged, now accounting for 60–65% of their budgets. Capital spending also increased from nearly 1% of GDP in 2022 to a projected 2.7% by 2025.
The reforms are part of broader efforts to enhance fiscal responsibility and ensure that public funds are better utilized for developmental goals across all tiers of government.
