FG Scraps FIRS, Customs, NUPRC Revenue Collection Costs

The Federal Government has announced its intention to permanently discontinue deductions made to agencies such as the Federal Inland Revenue Service (FIRS), Nigerian Customs Service (NCS), and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for the cost of revenue collection.

Minister of Finance and Coordinating Minister of the Economy, Wale Edun, revealed this in Abuja while speaking at a panel session after the launch of the October 2025 edition of the World Bank’s Nigeria Development Update, titled “From Policy to People: Bringing the Reform Gains Home.”

He said following a presidential directive, several layers of deductions previously made before sharing proceeds from the Federation Account Allocation Committee (FAAC) have now been scrapped to improve fiscal transparency and ensure that more resources reach the three tiers of government.

“Funds have flowed to the Federation Account, but the point is this: efficiency of that spending is critical We have been mandated by His Excellency, President Bola Tinubu to take a look at deductions, not just the deductions for cost of collection, but deductions generally, as we saw, when you look at the gross figure, you see all kinds of deductions before you get to the net distributable figure, which goes to the federal, state and local governments. And I must inform you that even during the last FAAC allocation, most of those deductions have been removed once and for all,” Edun said.

The minister further stated that the reform is part of the government’s broader effort to strengthen fiscal governance, promote transparency, and ensure that federal and subnational governments have more predictable revenues to fund development projects.

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He said the government was reviewing all forms of deductions from gross revenues, including refunds and interventions, to ensure that every naira collected is efficiently used for national development.

Edun explained: “The constitution says that funds should flow from revenue-collecting agencies into the federation account and be distributed according to the then formula, and that is what is now being done. And we can expect it’s a work in progress in terms of the review of the different deductions, but what we can expect is greater transparency, efficiency, funding for development at the federating units, the federal government, and the states, and of course, flowing from the states to the local governments.”

Continuing, he said: “So, we are looking at a much stronger fiscal situation. We are going to be looking at much stronger accountability, transparency, and efficiency of spending. We are cleaning that up because efficiency and transparency are key to achieving fiscal sustainability.”

Under Nigeria’s fiscal structure, the FIRS, NCS, and other agencies have traditionally retained a percentage of revenues they collect as a “cost of collection.”