FG seeks improved digital approach towards tax collection among Commonwealth members

The Federal government is seeking an improved digital approach towards the collection of revenue among the over 47 member countries of the Commonwealth Association of Tax Administrators (CATA).

Speaking at the 42nd Technical Conference of CATA in Abuja on Monday, the Minister of Finance, Budget and National Planning, Mrs Zainab Shamsuna Ahmed said Nigeria has remained at the forefront of the global efforts at finding equitable and lasting solutions to international tax issues.

“Over the past few years, our government has committed huge monetary and human resources to champion the cause of developing countries.

“It is important for CATA and similar organisations to blend their voices with ours to insist that skewed international tax rules be straightened for the good of all.

“The theme of this year’s conference, I am told, is ‘Tax Administration in a Digital Era’. This is very apt and timely considering that the business world had moved away from the ‘brick and mortar’ model unto the fast-paced, globalised and digitalised model.”

She stated that “tax administrative processes must keep pace with changes in the business world. An African adage says ‘where the hunter has learnt to shoot without missing, the birds that would avoid the hunter’s soup-pot must learn to fly without perching.

“Since businesses are evolving from physical presence to virtual place, tax administrations must also shift gear unto the virtual realm.

“I am hoping that this conference will discuss and recommend solutions to some issues, such as the digitalisation of tax administration.

“It is a fact that the tax administrations of most developing countries are based on manual processes. In these tax administrations, ICT function is limited to the provision of hardware and basic software in a support capacity.

“Whereas, in automation, large data, artificial intelligence and machine learning capabilities are central to effective tax administration. Such capabilities will enable tax authorities to do e-invoicing, pre-populate tax returns, carry out automated tax risk profiling, etc,” she stated.

Ahmed explained that the “digital era is quite exciting considering the possibilities – exotic products, efficiency, remote-working, etc. However, in them are embedded the tax challenges e.g. problems associated with identifying, tracking and accessing taxable transactions, income or persons.

“Extant rules are based on physical presence which renders them inapplicable in the digital era. Countries must cast aside their differences or individual self-interest to jointly develop workable, simple and fair solutions. Nigeria is committed to working with other jurisdictions and international bodies to achieve a win-win solution.”

In his address, the President of CATA, who is also the Executive Chairman of the Nigerian Federal Inland Revenue Service (FIRS), Muhammad Nami notes that “in recent times, there has been an upsurge of disruptive technological innovations in the business environment.

“These have triggered peculiar issues that tax authorities are grappling with. The business world is in a state of flux; while the character of data and its management keeps changing.

“Consequently, tax administrators are under compulsion to align their mandates with the changes arising from technological advancements.”

He said In diverse ways, all members of CATA have to deal with the challenges that transformational technology has brought to the commercial space and stay ahead of the conversation.

On his part, the Executive Director of CATA, Duncan Onduru said it is important for tax administrators to use the digital tool to improve revenue collection among members countries

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