• Govt To Scrutinise Process

The “cost of collection” deducted by Nigeria’s key revenue-collecting agencies rose by 33.43 per cent, or N339.33 billion, to N1.35 trillion last year from N1.01 trillion in 2024, findings by New Telegraph show The findings come against the backdrop of the announcement by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, last Friday, that the Federal Government would start scrutinising cost of collection claims made by the revenuecollecting agencies , as part of its efforts to boost government savings.

Key revenue-collecting agencies that will be under scrutiny are the Nigeria Revenue Service (NRS), which until January 1, 2026, operated under its former name-Federal Inland Revenue Service (FIRS)-, the Nigeria Customs Service (NCS) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).

An analysis of the communiqués released by Federation Account Allocation Committee (FAAC) for its meetings in 2025 shows that revenue collection cost for the three agencies stood at N107.79 billion in January 2025, N89.09 billion in February, N85.38 billion in March, N101.05 billion in April, N111.91 billion in May and N162.79 billion in June. The data further shows that the agencies’ revenue collection cost stood at N152.68 billion in July, N124.84 billion in August, N116.15 billion in September, N115.28 billion in October, N84.25 billion in November and N104.70 billion in December.

According to the then extant cost-of-collection ratios the FIRS received four per cent of non-oil revenues; the NCS got seven per cent of customs duties and levies, while the NUPRC received four per cent of royalties, rents, and other oil and gas sector revenues. New Telegraph reports that in its Nigeria Development Update (NDU), released on October 8 last year, the World Bank raised concerns over Nigeria’s rising cost of revenue collection, which it warned, threatened the country’s fiscal efficiency despite recent gains in nonoil revenue mobilisation and digital tax reforms.

The Washington-based multilateral development institution noted in its report that Nigeria’s revenue collection expenses had grown faster than actual revenues in the past three years, widening the gap between what the government earns and what it retains for development spending.

It also noted that while Nigeria’s total federally collected revenue was maintaining an upward trend, aided by higher oil receipts, improved tax compliance, and inflationadjusted nominal gains, the country’s cost of revenue collection had more than doubled in just two years, underscoring how administrative expenses continue to climb despite automation and digital reporting upgrades.