Analysts have said that digitalization, which refers to the deployment of digital technologies to change business models and improve revenues, is the long-awaited solution to Nigeria’s perennial revenue generation challenges.
They are of the view that digitalizing a revenue generating agency can expand its frontiers, give it a competitive edge to function effectively, efficiently and faster for optimal benefits.
Against this backdrop, therefore, some have stressed the need for government functionaries in charge of revenue generation at all levels to key-in and deploy digital technologies with a view to achieving revolutionary success.
Following from this, the Federal Inland Revenue Service (FIRS) under its current Executive Chairman, Muhammad Mani, hit the ground running at inception by embracing digitalization to drive revenue generation, with amazing successes.
In June, 2021, FIRS announced the introduction of an online integrated Tax Administration Solution (TaxProMax) as its flagship revenue revolution program, aimed at easing tax administration, assessment, collection, compliance and modernization in Nigeria.
The new platform, which is for naira-denominated transactions, enables seamless registration, filing and payment of taxes, automated crediting of withholding tax and other credits to the taxpayers’ accounts, among other features.
The platform also avails all taxpayers with a real-time, single-view of any transactions which they have with the FIRS from anywhere.
Within the first month of Tax-Pro-Max coming on stream , FIRS generated over N664 billion, the highest revenue it ever generated in a single month since the outbreak of COVID-19.
Thereafter, FIRS announced the launch of another online portal to address the issues of fake Tax Clearance Certificates (TCC) that have been rampant in the country.
The portal, which is a state-of-the-art, user-friendly platform, detects any TCC that is not duly issued by FIRS, and so effectively addresses the activities of fraudsters who make fake TCCs.
Speaking at the 2021 West African Tax Administration Forum’s (WATAF) General Assembly, themed, “The Taxation of the Digital Economy: Exploring Untapped Revenue Sources In Africa,” Nami attributed his revolutionary successes to digitalization.
He explained that, “At the Federal Inland Revenue Service, Nigeria’s premier tax authority, we have recently deployed our integrated tax administration system known as the TaxProMax, to ease tax administration and compliance.
“This cost-saving, effective solution that was developed in-house by the staff of the FIRS, is a user-friendly technological platform, which is accessible by tax officers and taxpayers alike, for most tax operations.”
Last week Friday in Abuja, the FIRS held a training workshop with a view to building on its recent successes, considering the crucial role that digitalization plays in expanding the frontiers of revenue generation.
The workshop, which was organized in collaboration with the Society for Women in Taxation (SWIT) had as its theme, “Expanding the Frontiers of Revenue Generation Through Digitalization: the FIRS Experience.”
Mrs Angel Fadahunsi, Director, Career and Skill Development, FIRS, while speaking at the event, noted that digitalization was key and critical to improving revenue generation.
She said, “There are key skills and technologies that we must master to make this happen: archival systems, robotic process automation, effective virtual communication, strategic planning, data management and more.
“The speed of change in financial technology is swift. We have all seen how the majority of business transactions, both public and private sector-based, are moving online and creating totally new fields to learn about in the last five years alone.
“These include e-commerce, e-currency, (e-Naira), the internet of things, cryptocurrency, blockchain, augmented/virtual reality, artificial intelligence, machine learning, biometric security systems, mobile payments (MTN/Airtel) digital banking like Kuda, Piggy Vest, Diamond, among others.”
Fadahunsi disclosed that in order to keep abreast of these technological developments, FIRS recently embarked on staff training and created a department to focus on artificial intelligence and data mining. to track revenue and block loopholes.
“The department is staffed with geeks who have been trained in the latest data analysis and visualization techniques and willing to improve processes and platforms to make their work seamless and super-efficient.
She said, “This is why the FIRS career and skill department has been focusing energies on building these technological skills in our staff and will indeed focus more on this in future.
“Clearly, it is imperative to invest in developing our staff to be able to meet up with these current trends, so the FIRS will be adopting virtual, collaborative learning for staff to keep up with the pace of development in the field.”
Mr Adesina Adedayo, President, Chartered Institute of Taxation of Nigeria (CITIN), underscored the impact of technology in driving revenue generation, especially in the developed countries, adding that FIRS was on the right track.
“Therefore, the FIRS’ introduction of various ICT initiatives to drive revenue generation, notable among which is the TaxProMax to improve revenue generation, is commendable and should be supported, ” the CITN President stated.
Mr Assishana Okauru, Director-General,Nigeria Governors’ Forum (NGF), suggests the immediate adoption of tax administration digitalization by state governments as an urgent and mandatory step towards revolutionizing their internal revenue generation.
Okauru underscored this emergency at a meeting in Abuja earlier in April organized by the NGF in collaboration with the FIRS, World Bank and International Centre for Tax and Development, with the theme,”Technology and Tax Event.”
He noted that digitalization brings about efficiency, provides opportunities for more people to be involved,and captured in the tax net, and urged state internal revenue services to key-in and benefit as none would afford to be left behind.
He stressed that,“Low technological integration in tax administration has undermined efforts to mobilise domestic revenues in the country, and this has undermined the capacity of tax authorities to collect taxes efficiently and the ability of taxpayers to meet their tax responsibilities conveniently.
“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.
“That is characterized by efficient, paperless operations, and equipped with ICT-enabled risk-based enforcement capable of optimizing their revenue mobilization strategies.”
Okauru, therefore, tasked tax authorities on what he described as 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.”
Also speaking at the event, FIRS boss, Nami, noted that taxation all over the world has always been the most reliable and sustainable source of government revenue if well harnessed and effectively administered.
According to him, “In most advanced jurisdictions, taxation has gone beyond the bricks-and-mortar model but relies more on data and intelligence which are driven by technology.”
“The adoption of technology in revenue administration processes is crucial and a major enabler for enhanced and sustainable revenue generation in a globalized and knowledge-driven world.
“Therefore, revenue authorities at all levels must adopt automated processes and embrace e-solutions both in their internal operations and in dealing with the taxpayers within their respective jurisdictions,” Nami added.
On the whole, analysts are of the view that a robust digitalization of Nigeria’s internal revenue generation drive by government at all levels is the panacea for her financial challenges.
This, they say, is especially expedient and imperative, given Nigeria’s unenviable status as a mono-economy nation-state that is dependent on an ever-dwindling oil revenue and a worsening debt burden.