It’s no longer news that the federal government is in dare need of revenue to deliver basic services to Nigerians. This need of the federal government has in a way put the revenue generation agency under pressure to deliver on promise.
In fact, the federal government had at a time said it would sell or lease some government properties to fund 2021 budget. This moves to overcome budget finance challenge was challenged by many concern Nigerians simply because, they don’t believe in the process.
Therefore, creating a sustainable pool of system that can administer own revenues in an easy, efficient and cost effective manner is a task the nation’s revenue house must content with.
Revenue collection is a fundamental task for the handlers of revenue generation that has become typically inefficient and generally reducing in many countries of the world courtesy of COVID-19 pandemic. Revenue collection is a major challenge facing many countries globally, but the challenges tend to be more acute in developing countries compare to developed countries.
Collecting revenue from large number of businesses and citizens is an ongoing challenge for many government, especially in the developing economies. There is constantly increasing pressure to collect more revenue with fewer resources and reduced budgets.
Recently, the Federal Inland Revenue Service (FIRS) anticipates revenue collection of N5.9 trillion in 2021. Its Chairman, Mr Muhammad Nami, announced the anticipation in Abuja while defending the Service’s 2021 budget before the House of Representatives Committee on Finance.
According to him, the 2021 budget was tailored to reposition the Service for a more effective tax collection for all tiers of government. He added that strategies had been put in place to enable electric tax collection so as to enhance compliance with the COVID-19 safety protocol of social distancing.
Nami said that the FIRS would also deepen synergy with its state counterparts to generate more revenue for the country. He said N289 billion was earmarked for the operations of the Service in 2021.
Sequel to this announcement, some analysts opined that, the application of technology is the only method the agency can use to generate revenue effectively in 21st century. For these Analysts, Digital and automation technologies work by maximizing the revenue collected from already-existing revenue streams.
Many governments have appreciable sums of untapped and undiscovered revenue hidden behind opaque internal processes, high operational costs and misallocated labour costs. Technology can access this hidden revenue by providing more effective and faster revenue collection.
Electronic automation also makes government more efficient without making it more burdensome. That’s because tech-driven revenue management can generate revenue windfalls without requiring unpopular tax hikes or the levying of additional fees.
At a time when a lot of constituents are hurting financially because of Covid-19, this emphasis on better revenue management, rather than on additional outside revenue sources, is the right way to take public sentiment and needs into account.
For governments stuck in a pinch after the economic fallout of Covid-19, new technology offers a way out. Digital processing and automated revenue management technologies can dramatically enhance government revenue while streamlining daily operations — providing cash-strapped governments with the means to succeed even under the most challenging of economic conditions. And beyond the budget, new technology creates a space where the private and public sectors can work hand in hand for the greater good of a country.
President Muhammadu Buhari also at a time said he wants the use of technology to plug loopholes in revenues. The President directed all government agencies to grant Federal Inland Revenue Service (FIRS) access to their systems in terms of tax collection.
The announcement was made from the President’s Twitter handle in which he said the country will deploy technology to plug revenue loopholes, and that the Federal Inland Revenue Service must deploy full automation with international best practice.
According to him, every Nigerian must see tax payment in it’s proper context which is an excellent and patriotic obligation that’s necessary for building a better society. No nation has ever made progress without making the necessary sacrifice.
This is strategically repositioning the tax revenue means in favor of indirect tax system in accordance with our tax policy document. To this end, the federal inland revenue service is mandated to do what is required in order to efficiently collect tax revenue due for transactions carried out using local and foreign means.
Aiming to facilitate automatic sharing of information between the federal inland revenue service and other federal government agencies, they will come together to put in place a formal data exchange mechanism. Specific taxpayers details, such as status filing of income-tax returns (ITRs), turnover, gross total income and any other field. The modalities of which shall be decided by the authorities involved will be covered by the tax laws in the nation’s finance act 2020.
Pundits believe that, the move will help authorities clamp down on evasion and under-reporting in direct and indirect taxes by putting a formal system in place. According to these no pundits, Nigeria’s revenue to GDP is 8% and other countries have doubled that. It’s important to use technology to plug loopholes so as to ensure that, what comes to the basket of the country is more than what they were used to collecting in the past.
The key issue here is revenue, therefore any government that wants to stall among it’s counterparts and also deliver devidend of democracy to it’s citizens must embrace technology to generate revenue.
