Abuja, Nigeria — October 6, 2025
In a major policy shift, the Federal Government of Nigeria has announced that revenue-generating agencies will no longer be permitted to retain a portion of the funds they collect on behalf of the government.
The new directive, disclosed on Sunday, officially ends the long-standing practice where agencies deducted operational costs from revenue before remitting balances to the national treasury.
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A Move Toward Fiscal Discipline
According to the government, the decision is part of a broader effort to strengthen fiscal accountability, improve transparency, and maximize revenue inflows into the Federation Account.
Under the new system, all revenues collected by agencies will now be remitted in full to the Treasury Single Account (TSA), after which operational budgets will be allocated directly by the Ministry of Finance and the Budget Office.
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What the FG Said
A senior government official explained that the reform aims to eliminate leakages and discretionary spending, which have historically reduced government revenue performance.
“Agencies must now submit their expenditure needs through the budget process rather than making deductions at source,” the official stated.
The new policy aligns with the recommendations of the Oronsaye Report and ongoing public sector reforms intended to streamline government operations and enhance efficiency.
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Impact on Agencies
Many revenue-collecting agencies — such as the Federal Inland Revenue Service (FIRS), Nigerian Ports Authority (NPA), and Nigerian Customs Service (NCS) — have historically retained between 2% and 7% of collections as cost of operation.
The new directive effectively abolishes that system, meaning all such funds must now be fully transferred to the government’s consolidated revenue account.
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Expected Benefits
Economists and policy analysts say the reform could significantly increase the government’s cash flow, especially at a time when Nigeria is seeking ways to fund critical infrastructure and social programmes.
However, they warn that agencies must receive timely budgetary releases to ensure operational efficiency is not disrupted.
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Public Reaction
Reactions have been mixed. While many Nigerians applaud the move as a bold step toward accountability, some insiders within revenue agencies worry it may slow down operations due to potential funding delays.
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The Bigger Picture
This decision marks one of the strongest fiscal reforms under the Tinubu administration, as the government pushes for greater control over revenue, improved oversight, and an end to discretionary retention of public funds.
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