The Nigerian Governors Forum (NGF) has disclosed that the COVID-19 pandemic has proved that all revenue administrations needed to move to a digital future. Director-general of the NGF, Asishana Okauru, stated this at a Technology and Tax Event organised by the Forum in Abuja on Monday. According to him, the event was aimed at supporting a learning ecosystem for tax administrations in Nigeria.
He further explained that the goal for the Forum was 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, characterised by efficient, paperless operations, and equipped with ICT-enabled risk-based enforcement capable of optimising their revenue mobilisation strategies.
He said: “lessons of the COVID-19 pandemic have pointed to one direction – that all revenue administrations need to move to a digital future.
“The last year has been described as the year of digital transformation on steroids, with many enterprises accelerating their digital transformation and cloud strategy.
“On the earnings call with Wall Street analysts in October last year, Microsoft CEO Satya Nadella acknowledged that “the next decade of economic performance for every business will be defined by the speed of their digital transformation.
“Even in the African continent, there have been several innovations which have been forced by the pandemic – including the provision of social assistance through mobile phone on a larger scale than ever before, as well as increased technology-based learning.
“2020 did for technology services what the 1930s did for financial services – with the growth in the regulation of commercial, investment banks, stock and commodity exchanges. We believe tax administration should be no different.
“We have taken this step 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.
“We will continue to do our 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. Overall, digitization does not only bring about efficiency, but it provides opportunities for more people to be involved.
“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 said.
He further explained that, “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% across all States in Nigeria.
“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. Historically, many governments have taken the path of least resistance, maintaining tax systems that allow them to maximise whatever limited options are available rather than expanding into digital and more efficient tax systems.
“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,” he added.
By Jonathan Nda-Isaiah,
The Leadership