Written By Olajesu Lordsfavour,
400Level Law Student, University of Ibadan.
Voluntary non-compliance in tax payment has grown to become a stain that the Federal Government has been making efforts over the years to remove. Sadly, despite the several strategies, credits, incentives including sensitization programs, many taxpayers are still non-compliant.
In light of this challenge which tax officials are trying to tackle, there is also on one hand, the clamor for Nigeria to meet up with her other African counterparts in the emerging digitization of tax process. The Nigerian Presidential Enabling Business Environment Council suggested various solutions that would simplify and automate the tax administration process. In addition to these advantages, The West African Tax Partner and Lead, Deloitte, Mr Tomi Olugbenro posited that digitization will go a long way in addressing low tax penetration and increase fiscal revenues while supporting economic stability in Nigeria. The Finance Act also lends credence to this submission by making provisions for the use of technology in improving tax administration.
While this sounds like a welcome development and a step in the right direction towards the ease of tax payments and administration, it is still important to consider the efficacy of digitization in tandem with the reality of the Nigerian environment.
Some of the digitization methods introduced include; e-registration of new taxpayers, e-payment of federal taxes and stamp duties, e-fling of returns, e-receipting and electronic issue of tax clearance certificate needed. As pleasing as it is to the ears, bringing it to life will pose some challenges.
The first challenge is the level of education in this part of the world. The Adult Literacy in Nigeria was pegged at 69.1% by The United Nations Development Program (UNDP). 60 million Nigerians can also not read and write according to the National Commission for Mass Literacy, Adult and non-formal education. This fact goes deep into the root of the problem Nigeria has always faced, long before the introduction of digitization. Many Nigerians are uneducated and the difficulty of communicating the importance of paying their taxes led us to the state of voluntary non-compliance. Digitization therefore presents more difficulty in ensuring that majority of the population pay their taxes. First is the difficulty in the access to digital platforms. Second is the uncertainty of comprehending the payment process and the e-system language. Except forms are printed on paper forms and made comprehensive in Nigerian native platforms, using digital technology will be typical of pouring water in a basket.
Furthermore, there is another challenge that stems from both uneducated and literate people. It is the distrust several citizens have with technology. Nigerians have become unreceptive to divulging sensitive financial information which can be used against them by fraud or cyber criminals.
Moreover, it is important to note that while the government advocates for digitization, the country is still way behind in the race for technological development. There is still no constant electricity supply, neither is there enough penetration of computers.
Regardless, these challenges are surmountable as long as the right steps are taken. Before fully delving into the digital world, administrators have to pay more attention to the Nigerian tax environment. It is after this that proper sensitization methods can then be strategized to prepare citizens for a change.
References:
Abimbola AbdulRahman Lekki (2021): Digitizing Taxation in Nigeria: Challenges and Recommendations.
Pro share ng: Digitization will help to address low tax penetration in Nigeria