Nigeria - Experts & stakeholders canvass tax automation at FIRS’ dialogue
Participants at the First National Tax Dialogue in Abuja, Nigeria
Country Correspondent: Sunusi Shu’aibu Gwaram
The Nigerian Government has been advised to explore data and intelligence to ease tax collection and improve its revenue base.
Tax experts, speakers, panelists and government functionaries gave the advice at the recently held First Annual National Tax Dialogue, in Abuja, organized by the Federal Inland Revenue Service (FIRS), with the theme ‘Taxation in a Post-Covid Economy’.
In his keynote address at the event, President, African Development Bank, Dr Akinwunmi Adesina, highlighted the pandemic’s impact on Africa’s economy and the various interventions by the Bank and national governments. According to him, Nigeria's economy shrank ‘by 3% in 2020 on account of falling oil prices and the effects of the lockdowns on economic activities,’ adding that ‘with shrinkage in oil revenues, debt service payments pose the greatest risk to Nigeria.’
He stressed further that for Nigeria to overcome the pandemic, ‘taxes must form a significant percentage of government revenue. Digitalization of tax collection and tax administration is critical to ensure greater transparency of the tax system, widening of the tax base while mitigating compliance risks and encouraging voluntary tax compliance.’
Stakeholders at the Tax Dialogue lauded the FIRS ‘for its performance in the 2020 fiscal year, despite operating in the most challenging period ever experienced. The FIRS not only collected N4.9 trillion in taxes, achieving 98% of its target; only 30.6% of this was attributed to Petroleum Profits Tax, from what used to be over 50%’.
However, participants at the event stressed the need to ‘interrogate how Nigeria can further deepen the use of technology to improve tax compliance nationally and across subnational.’ This was important because ‘a significant proportion of our population will soon come into the workforce’ which is ‘a golden opportunity to introduce first-time taxpayers to their civic responsibility, by adopting technology.’
Similarly, the Executive Secretary, African Tax Administration Forum (ATAF), Mr Logan Wort, harped on the place of technology in generating revenue for the country in a post-Covid economy. Mr Wort, who joined the Dialogue virtually from South Africa, stated that ‘Domestic Resource Mobilization (DRM) is expected to contribute at least 75% to 90% on average per country’ in the post-Covid era, adding that Nigeria and other African countries should note that ‘improved tax revenue will have to take a prime position’ in the scheme of things.
Mr Wort urged Nigeria to pay serious attention to e-commerce and the digital economy sector where big trans-national digital conglomerates like Google, Netflix and Uber operate and make huge, tax-free profits as a possible way of increasing tax revenue generation. He said Nigeria should borrow a leaf from Ghana in e-commerce taxation, which is projected to fetch Ghana $450 million in tax revenue.
The Nigerian Minister for Communications and Digital Economy, Dr Ali Isa Pantami, who chaired the second-panel session, stressed that taxpayers should be treated like kings and canvassed better funding of the FIRS.
Nigeria’s first female professor of taxation, Prof (Mrs) Teju Somorin, President, Association of National Accountants of Nigeria (ANAN); Prof Muhammad Mainoma, Member, FIRS Board; Mrs Adetola Ehile-Aigbangbee, Group Managing Director (GMD), Nigerian National Petroleum Corporation (NNPC); Mr Mele Kyari, Mr Yomi Olugbenro of Deloitte Nigeria; Mr Taiwo Oyedele, Principal Partner, PWC; and Mr Tajudeen Akande of PKF served as discussants at the sessions.
The Executive Chairman, Muhammad Nami speakng at the 1st National Tax Dialogue in Abuja, Nigeria