The Nigeria Revenue Service (NRS) does not simply collect, assess, and administer taxes in Nigeria. NRS has other functions. This is discussed in this article and in other articles in this category in the future.
One of these functions is Section 4(1d) of the Nigeria Revenue Service (Establishment) Act, 2025. This subsection explains how NRS collaborates with other ministers and agencies of government, reviews the current tax regime, and promotes the use of taxation for economic growth.
NRS, Ministries and Agencies Synergy
The Act empowers the Nigeria Revenue Service to collaborate with Ministries and agencies of government. If this is done, it will lead to synergy. The tax authority will be able to collect taxes effectively.
For example, the FIRS (or NRS from January 2026) collaborated with the Corporate Affairs Commission (CAC) and the National Identification Management Commission (NIMC) to integrate the Tax Identification Number (TIN) into the CAC registration number for companies and the bank NIM for individuals.
Recently, the FIRS has collaborated with the French government on tax matters as part of its collaboration function. They have also collaborated with various countries to prevent double taxation and ensure that remote workers are taxed in the 2025 tax reform Acts.
Review of the tax regime
In section 4(1d), the NRS function includes reviewing the tax regime or reforms. This function is core to the Federal tax authority. From time to time, there may be a need for clarity on a section or subsection of a tax law. It is the duty of the NRS to explain them.
The new tax reform talks about a consolidated rent relief. It allows individual taxpayers to deduct 20% of their rent from their computed income to determine the tax chargeable. But some problems arise. These include:
How will a husband and wife who pay joint rent deduct this relief?
What about friends living together and sharing the rent payment?
Issues like this are decided by the tax authorities. They will release a statement explaining sections of the law that seem confusing to taxable persons.
Promote, stimulate, and grow the economy through taxation
It is the function of the NRS to use taxation to promote economic development. Stimulate investments that will grow economic activities in the country. Growth in economic activities can be stimulated through collaboration and reviews of tax reforms explained above.
If a new tax law and finance act is released yearly that favours investors, more funding will come to Nigeria. Thereby stimulating economic activities.
For example, the Nigeria Tax Act 2025 states that capital gains tax will be 25 per cent. A review of this shows that it will reduce the net gains from high-net-worth investors who sell their shares. As a result, the Ministry of Finance suspended the capital gains rate of 25%.
Final words: NRS functions are not limited to assessing, collecting, and administering taxes only. They also collaborate and review tax laws to promote economic development. Therefore, they serve as a driver of economic activities and growth.