In the face of a dwindling revenue base, it is not far fetched to say top in the agenda of government globally is to rid its system of irregularities limiting its revenue-generating capacity. The Federal Government of Nigeria is not taking a backbench as the need to plug all revenue loopholes was re-ignited recently.
This reminder came as a directive from President Muhammadu Buhari few days ago through a tweet reinstating the importance of deploying technology to curb inefficiencies in revenue generation, thereby directing the Federal Inland Revenue Service, FIRS to fully deploy automation to monitor its processes.
The President also directed all government agencies to grant FIRS access to their systems for a seamless process and urged the revenue-generating agency to conform with international best practices in doing so.
Taxmobile.Online gathered that this development is coming at a time where the FIRS in a bid to shore up the government’s revenue base is undergoing major reforms to make the agency function more effectively and of course, expand the tax net.
Going down memory lane
Recall that late Spetember 2020, the FIRS inaugurated a new Automatic Exchange of Information Common Reporting Standard (AEOI-CRS) system for use by financial institutions in the country.
The revenue-generating agency disclosed then that the innovation is part of its ongoing reforms to align the country’s tax system with global standards as advocated by the president in his tweet.
The AEOI-CRS makes possible and compulsory the digital enrolment of all Reporting Financial Institutions (Commercial Banks, Merchant Banks, Discount Houses, Mortgage and Development Banks, Insurance and Life Assurance Companies, Investment Advisers, Trustees, Asset Management Companies, Issuing Houses, Brokers/Dealers, etc).
By the development, Reporting Financial Institutions (FIs) were required to designate an appropriate officer as Primary User (PU). By implication, the PU is the custodian of the Financial Institution’s login details on the portal.
Contrary to advocating digital migration, also recall while addressing tax administrators from West African countries at a three-day Capacity Building Seminar in Abuja, organized by West Africa Tax Administration Forum (WATAF) and the Inter-American Centre for Tax Administrations (CIAT) in August 2020, The Chairman of FIRS, Mr. Muhammad Nami cautioned tax administrators against the disruptive tendencies that were undermining tax collection in the country.
Nami then, warned that ICT based inventions like Blockchain, Machine Learning, and Artificial Intelligence that were embedded in the Fourth Industrial Revolution, were greatly undermining the sector.
The FIRS boss noted that while these technological innovations were beneficial to revenue agencies in their assigned national task, they were also detrimental to effective tax collection.
Taxmobile.Online recall his words below,
“Such technologies have disruptive tendencies because they have created new, fluid, hard-to-trace ways of doing business that makes it difficult for revenue agencies to tax their transactions.
“In the current world, disruptive technological innovations such as Blockchain technology, Machine Learning, and the whole gamut of Artificial Intelligence (AI) have dire consequences for developing economies in terms of revenue loss and high staff turnover.
“The effects are also in the areas of staff dissatisfaction and deliberate `Headhunting’ of the very best of our employees by private entities which continue to deplete our workforce.
“It is important for us as managers of human resources in tax administrations, to recognise the dynamics of changes occurring in the world in terms of the way businesses are being done and reported,” Nami said.