Controversy surrounds the proposed merger of the Nigerian Maritime Administration and Safety Agency (NIMASA), the Nigeria Customs Service (NCS), and the Federal Inland Revenue Service (FIRS).
President Bola Tinubu’s Policy Advisory Council had recommended the merger to enhance revenue generation and suggested declaring a state of emergency on revenue generation.
The council proposed that the combined agencies, renamed the Nigerian Revenue Service, would efficiently collect direct and indirect taxes and levies on behalf of the government.
The National Economy Sub-Committee supported this policy and recommended the passage of an Emergency Economic Reform Bill to grant the President special powers for economic reform.
The proposal, however, has faced opposition from the business community, particularly maritime stakeholders who consider the merger detrimental.
They argue that merging NIMASA with other agencies would lead to job losses and negatively impact Nigeria’s standing in the International Maritime Organisation (IMO) under the United Nations. Critics emphasize that NIMASA’s mandate is not revenue collection, as it operates as an international agency under the IMO charter.
They believe that the merger with FIRS would go against the established purpose of NIMASA and could have negative consequences for the shipping industry, which plays a vital role in global trade.
Experts and former government officials question the rationale behind merging NIMASA with tax-collecting agencies like Customs and FIRS.
They argue that NIMASA’s primary focus should be the development of the maritime industry and capacity-building for indigenous operators, not revenue collection.
They stress that such mergers are not common worldwide, while acknowledging that other countries have consolidated their revenue collecting agencies. They suggest that the government should instead prioritize owning national shipping lines to reduce the significant annual loss of $17 billion to foreign ship owners.
Dr. Muda Yusuf, the CEO of the Centre for the Promotion of Private Enterprise (CPPE), emphasized that the Nigerian Customs Service has two main roles: trade facilitation and revenue generation.
He acknowledged that Customs plays a significant role in revenue generation and information gathering related to trade.
However, he suggested that there should be a strong synergy between Customs and the revenue service due to their shared responsibilities and the potential for revenue generation.
Dr. Yusuf expressed reservations about merging the Nigerian Maritime Administration and Safety Agency (NIMASA) with the revenue service.
He argued that NIMASA, like the Nigerian Ports Authority (NPA), is not primarily a revenue-generating agency.
He recommended thorough engagement and discussions with stakeholders before making a decision, as rushing into such a proposal could create more problems for operations and revenue generation.
According to Dr. Yusuf, rigorous engagement and studies are necessary to identify inefficiencies and leakages in the revenue processes before making decisions.
He mentioned a previous attempt to assign accountants to collect revenue at ports, which was ultimately unsuccessful.
He emphasized the importance of considering wider implications and engaging with stakeholders to ensure informed decision-making.
Frank Ogunojemite, the National President of the African Association of Professional Freight Forwarders and Logistics of Nigeria, shared concerns about the proposed merger.
He believed that merging the three agencies would foster corruption and create unnecessary obstacles.
Ogunojemite stressed the need for President Bola Ahmed Tinubu’s administration to consult experts and thoroughly assess economic policies before implementing them.
He warned that the merger could hinder ease of doing business, have negative effects on the African Continental Free Trade Agreement, and jeopardize Customs’ single window policy.
The League of Maritime Editors (LOME) has strongly advised against the proposed merger of the Federal Inland Revenue Service (FIRS), Nigerian Customs Service (NCS), and the Nigerian Maritime Administration and Safety Agency (NIMASA) into a single agency called the Nigerian Revenue Service (NRS).
LOME believes that the proposal is ill-conceived, misleading, and would have dire consequences, including mass layoffs.
The association argues that Customs and NIMASA have distinct statutory roles in trade facilitation and maritime regulation, respectively. The only similarity is the collection of the three percent levy from vessels for administrative purposes and promoting indigenous shipping development. Both agencies contribute to the consolidated revenue fund, just like FIRS.
LOME highlights that merging the agencies would further reduce employment opportunities for Nigerian youths, as it would lead to significant downsizing and favoritism in retaining personnel. The association suggests that the government should explore alternative ways to control expenditure in these agencies without resorting to a merger.
LOME concludes that mergers should be considered for underperforming agencies rather than well-established ones.
Overall, the controversy surrounding the proposed merger stems from concerns about the potential negative impact on NIMASA’s international standing, the maritime industry, job security, and the agency’s core mandate.
Critics have argued that the focus should be on developing the industry and supporting indigenous operators, rather than merging agencies with different purposes.
