The minister also said President Tinubu has authorised an Executive Order to ensure foreign exchange held in cash by Nigerians is paid into the banking system.
The Minister of Finance, Wale Edun, has proposed a unified revenue collection, with the Federal Inland Revenue Service (FIRS) collecting revenues on behalf of the Nigeria Customs Service (NSC) and other revenue-generating agencies.
Mr Edun spoke at the budget defence session held by the House of Representatives Committee on Finance on Tuesday.
The minister made the proposal while responding to a question by a member of the House, Oluwole Oke (PDP, Osun).
Mr Oke had asked him if the FIRS and NCS could be merged into a single entity or agency.
Mr Edun responded that it would not be out of place if the FIRS was given the mandate to collect revenue on behalf of customs.
He stated that there is no reason all revenue-charging agencies should also be saddled with collecting revenues.
''In terms of the merger, what you are really indicating and speaking to is the fact that revenue collection should be through a focal point.
''They can pay to a centralised point, the Federal Internal Revenue Service. They can collect on behalf of all the agencies. So these are the types of innovations, these are types of efficiencies and improvements that we must look at.
''I am just agreeing wholeheartedly with you that given this day and age, given the technological advancement, given the digital tools available, we really should be doing better in terms of revenue generation, collection and monitoring,'' he said.
Merger of revenue collection agencies has been a popular discourse within the fiscal space. Earlier in July, President Bola Tinubu approved the establishment of a Presidential Committee on Fiscal Policy and Tax Reforms and appointed Taiwo Oyedele as the chairman of the committee.
The committee's primary objective, according to the government, is to enhance revenue collection efficiency, ensure transparent reporting, and promote the effective utilisation of tax and other revenues to boost citizens' tax morale, foster a healthy tax culture, and drive voluntary compliance.
Replace tax waivers with tax rebates
Some of the lawmakers who spoke at the session faulted the current tax waiver system, noting that the government is not getting value for money.
Responding to the issues raised by the lawmakers on tax waiver, Mr Edun said there is an ongoing effort by the government to carry out a cost-benefit analysis of the policy.
He suggested that the government should consider a tax rebate system which is more ''effective'' than the current system.
''In terms of tax waivers, exemption basically incentives, there is a set of incentives which effectively is government expenditure. The government is spending on encouraging manufacturing, exports and so forth.
''It is worth approximately as you rightly said about one per cent of GDP and I know the Fiscal Policy and Tax Reform Committee is looking very closely and the Ministry of Finance will as well. 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, is being done right now and we expect tremendous savings.
''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,'' he said.
Sign up for free AllAfrica Newsletters
Get the latest in African news delivered straight to your inbox
Targeting billions of dollars outside banking sector in Nigeria
When asked about the status of Nigeria's foreign reserve, Mr Edun did not give a specific figure. He instead told the committee that the government is focusing on the billions in the hands of Nigerians within the country.
He said there are billions of dollars outside the banking sector in Nigeria, adding that the new Executive Order signed by the president 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 authorised 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.
After the presentation, the minister was asked to take a bow and go by the Chairman of the Committee, James Faleke (APC, Lagos).
