States to pursue digital tax administration for improved IGR

digital tax

BY KAMARUDEEN OGUNDELE, ABUJA

Governors of the 36 states are pursuing modern taxpayer-friendly and technology-driven revenue administrations for improved Internally Generated Revenue (IGR).

The Director-General of Nigeria Governors Forum (NGF), Asishana Okauru, revealed this in Abuja on Monday during the opening of the maiden ‘Technology and Tax Event”.

The event was organized by the forum in collaboration with the World Bank and the International Centre for Tax and Development.

Okauru identified weak environment and low technological integration in tax administration as factors militating against efforts to mobilise domestic revenues in the country.

According to him, most contact-intensive taxes are at risk, given the lessons learnt during the period of the COVID-19 lockdown where taxes collection fell by an average of 40 percent across all states in Nigeria.

He stated that the lessons of the COVID-19 pandemic had revealed that all revenue administrations need to move to a digital future.

He said, “Specifically for tax authorities, one big lesson that we have learnt is the criticality of internet-based business support systems and payment platforms for the automation of all back-end operational processes and payments across all revenue streams.”

Okauru added that the forum had taken steps to bring together technology providers, service providers and researchers in the tax space into one network to take advantage of the innovation that is taking place.

He said that the NGF would continue to do its best to bring such collaborations together to provide opportunities for States to benefit from a global perspective and to ensure no state is left behind.

Okauru said, “Amidst this transformation, we also recognise risks of data ownership, data protection and cyber security.

“This each government must envisage. It would require a strong in-house IT team and an experienced legal department that will help protect the interest of all parties, including taxpayers.

“The pathways to achieving tax digitalisation may vary from State to State but the conditions remain the same, including providing broadband access and supporting the growth of digital skills in the wider economy.

“Luckily, payment providers and governments in regions that have lagged in digitization, in many cases, possess greater potential for revenue increase in the digital future.

“The goal for us is to help facilitate the scale up of modern, taxpayer-friendly, and technology-driven revenue administrations in all States of the federation that will be capable of providing world-class services, characterided by efficient, paperless operations, and equipped with ICT-enabled risk-based enforcement capable of optimising their revenue mobilization strategies.”

The Chairman of the Federal Inland Revenue Service (FIRS), Mohammad Nami, at the event stressed the need to look inwards on how to improve the revenue of the states to augment the shortfall of allocations from the Federation Account.

He explained that taxation all over the world had always been the most reliable and sustainable source of government revenue if well harnessed and effectively administered.

He lamented that the reliance on oil revenue in the previous years had exposed the country to huge revenue challenges and resulted in poor budget implementation across the three tiers.

Nami noted that proffering solution for the nagging revenue challenges required a deliberate strategic action plan.

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