The ambitious move by the Federal Inland Revenue Service (FIRS) to embrace the digitization of tax processes has continued to gather momentum after the Nigerian government reiterated its commitment to a digital economy.
A digitalized tax administration refers to using advanced platforms to enable real-time or near real-time collection and analysis of detailed taxpayer data.
According to experts, a digitalized tax administration process will block revenue leakages and revolutionize revenue generation for Nigeria.
It will also put a stop to illicit financial outflows from the country and enforce tax compliance among multinationals operating in the country.
TechEconomy gathered that Nigeria may have lost about $178 billion (about N5.4 trillion) to tax evasion by multinationals in ten years.
“Nigeria’s economy is fast digitalizing and digitalization of the Nigerian economy means that the ways and manners of organizing and doing businesses have changed,” Professor Yemi Osinbajo said on Thursday.
Professor Yemi who was represented by the Executive Chairman of the FIRS, Muhammad Nami, at the recent Chartered Institute of Taxation of Nigeria’s (CITN) 24th Annual Tax Conference, said the government will continue to heavily invest in the automation of tax administrative processes and digital infrastructure.
Professor Osinbajo noted that the theme for the tax conference, “Global Disruption, Taxation, and Digitalisation: Implication for Socio-Economic Development” aptly captures the prevailing realities within the national and global digitalization.
“Indeed, the radical changes brought about by digitalization have displaced the traditional approach to tax administration. Consequently, the digitalization of tax administration is unavoidable.
“He revealed the government has provided the enabling environment for a digitalized tax administration by making the necessary tax policy changes.
Additionally, he said, the government is also developing rules for taxation of the digital economy, enactment of required legislation, and providing necessary political backing for the team negotiating the new international tax rules for the digitalized economy.
However, the Vice President urged the institute to see its role in society as a pillar of the country’s socio-economic development.
“The possible impact of non-compliance by taxpayers—whom you hold briefs for—on the government’s revenue and the larger society is crucial and must be given topmost priority while holding briefs for them.
“In doing so, you must always bear in mind the pronouncement of the Court of Appeal in Phoenix Motors v. National Provident Fund Management Board (1993) that it is in the best interest of the society at large that government be in revenue.“
It is through this prism that I see your Institute as a pillar for the socio-economic development of Nigeria and the emancipation of the downtrodden of our society.
Without a doubt, your members will continue to discharge the solemn and sacred responsibility of ensuring that the interest of the larger society in Nigeria is not trodden upon; and this you must do with patriotic zeal,” he noted.