FIRS calls for adoption of technology in tax processes to block revenue leakages

Mohammed Nami, executive chairman of the Federal Inland Revenue Service (FIRS), says the adoption of technology is needed to improve tax collection and block revenue leakages.

He was speaking on Monday in Abuja at the opening of the maiden ‘Technology & Tax Event’, organised by the Nigeria Governors’ Forum (NGF) with the support of the World Bank and the International Centre for Tax and Development (ICTD).

The FIRS boss, represented by Hamman Abubakar, the service’s coordinating director, emphasised the need for federal and state governments to shore up revenue in order to meet the budgetary gaps.

He 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 Nami, the current financial crisis is as a result of the country’s over-reliance on oil revenue.

“For us as a mono-product economy, the reliance on oil revenue in the previous years has exposed our dear country to huge revenue challenges and resulted in poor budget implementation across the three tiers,” Nami said.

“Therefore, proffering solution to these nagging revenue challenges requires a deliberate strategic action plan hence the need and justification for today’s event.

“Taxation, in most advanced jurisdictions, 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.

“The need to embrace technology in tax administration was the basis for the choice of our theme, ‘Leveraging on technology solution for enhanced administration of indirect taxes’, at the 145th joint tax board (JTB) meeting.

“The JTB meeting harped on the need to further broaden and increase revenue generation at all levels by leveraging on ICT and that the adoption of technology will optimize and harness the various taxes and plug revenue leakages.”

Also speaking, Asishana Okauru, director-general of NGF, said the COVID-19 pandemic showed that all revenue authorities at all levels need to move to a digital future.

“From our research last year, we already know that most contact-intensive taxes are at risk, given the lessons we learnt during the period of the lockdown where taxes collected from contact-intensive taxes fell by an average of 40 percent across all States in Nigeria,” he said.

“Coupled with a weak environment for tax policy and tax legitimacy, low technological integration in tax administration has undermined efforts to mobilise domestic revenues in the country.

“This has undermined the capacity of tax authorities to collect taxes efficiently and the ability of taxpayers to meet their tax responsibilities conveniently.”

He made the call for taxpayer-friendly and technology-driven revenue administrations in all 36 states of the federation, adding that each government must put necessary measures in place to mitigate against associated risks.

“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; characterized by efficient, paperless operations, and equipped with ICT-enabled risk-based enforcement capable of optimising their revenue mobilization strategies,” Okauru added.