FG Moves to Plug Revenue Leakages, Probes High Collection Costs

Nigeria’s fiscal authorities are intensifying a crackdown on revenue-at-source deductions as the Federal Government moves to plug systemic leakages that have long depleted  national purse.

Wale Edun, Minister of Finance and Coordinating Minister of the Economy, disclosed this during a press conference in Abuja on Friday. He emphasised that the move had become imperative owing to the increasingly ‘unfriendly’ nature of global financial markets towards developing countries, necessitating a reliance on domestic resource mobilisation.

BusinessDay’s findings show that the ‘cost of collection’ deducted by revenue agencies remains high, reaching N1.25 trillion between January and November 2025. Notably, this figure is higher than the individual statutory allocations received by many States from the Federation Account during the same period.

The agencies under scrutiny include the Nigeria Customs Service (NCS), the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the Federal Inland Revenue Service, which is currently transitioning into the Nigeria Revenue Service (NRS).

The minister explained that under the Fiscal Responsibility Act and supplementary financial regulations, agencies are generally expected to limit their operational spending to a maximum of 50% of their gross collection with the resulting operating surpluses paid into the Federation Account.

He noted that by scrutinising these claims, the Go9vernment expects to unlock billions in hidden savings, marking a shift toward a more transparent, digital-first remittance architecture.

“In this particular case, we are looking not so much at the percentage they are allowed to spend, but the quantum—ensuring they are not spending more than is necessary and that their budgets are not bloated,” Edun said. “They are restricted by fiscal responsibility rules; they cannot spend 100 percent of what they collect. There must be checks and balances.”

The minister further linked the scrutiny to the recently signed Executive Order 9 of 2026, which mandates the direct remittance of oil and gas revenues.

“At a time when financial markets are particularly unfriendly, our own resources and our capacity to effectively collect and spend them are the only viable alternative. The exact figures to be saved from both the executive order and the revised cost-of-collection ratios will be made public in due course,” he added.

Edun reiterated that even prior to the latest Executive Order, efforts were underway to conserve revenue for critical investment in social services, infrastructure, and public utilities.

“The Federal Executive Council (FEC) mandated a subcommittee to look at these deductions and the amounts being charged for the task of collection. It is within this context that Mr. President directed that the three elements—management fees, the frontier fund, and gas flare penalties—flow directly to the Federation Account.

“I don’t want to say it’s an interim measure, but it’s a measure that is in place now. And there is a committee that has been settled to implement it efficiently. We are meeting next week,” the minister added.