How new technology can hinder effective tax collection ― Nami

Chairman, Federal Inland Revenue Service (FIRS), Mr Muhammad Nami on Tuesday alerted tax administrators to potential dangers that new technological innovations pose to the effective collection of taxes.

At the start of a 3-day capacity building seminar for tax administrators from across West Africa in Abuja on Tuesday, Nami warned tax administrators in developing countries especially Africa to the disruptive tendencies embedded in the fourth industrial revolution is currently being driven by powerful information and communication technology (ICT)-based inventions like blockchain, machine learning and artificial intelligence (AI).

Although he explained that such innovations could be deployed to helping revenue agencies in their assigned national task, they also have great ability to undermine tax collection because they have created new, fluid, hard-to-trace ways of doing business that makes it difficult for revenue agencies to tax their transactions.

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“In the world presently, the 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 staff 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”, with a view to adjusting accordingly in order for these revenue agencies to meet their mandates to the government and people of their respective nations.”

The seminar according to him, “provides an opportunity for capacity building and peer learning amongst tax administrators” and urged all participants “to take advantage of this event to enable us to forge knowledge-based collaborations that will enhance our capacity to turn these challenges into opportunities for staff development.”

“The increasing recognition of the important role of tax administrations in sustainable domestic revenue mobilisation for our governments has expanded our scope of operations thereby making it necessary for us to re-jig our approach to human resources management.

“I call on you all to make a resolution that after this three-day training you will form a mind-set that is tuned towards harnessing previously untapped potentials that exist in our systems by optimal use of our human resources in accordance with the global best practices.”

The seminar, being hosted by FIRS in collaboration with the West African Tax Administration Forum (WATAF) and the Inter-American Center for Tax Administrations (CIAT) drew instructors and participants from several West African countries, North and South America.

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