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Taxation In A Post-Covid Economy: Experts, Stakeholders Canvass Tax Automation At FIRS Dialogue

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The Federal Government has been advised to explore data and intelligence in order to ease tax collection and improve its revenue base.

Tax experts, speakers, panelists and government functionaries gave the advice at the recently held First Annual National Tax Dialogue in Abuja, organized by the Federal Inland Revenue Service, with the theme: “Taxation in a Post-Covid Economy.”

In his Keynote Address at the event, President, African Development Bank, Dr. Akinwunmi Adesina, highlighted the pandemic’s impact on Africa’s economy and the various interventions by the bank and national governments.

According to Adesina, Nigeria’s economy shrank “by 3 per cent in 2020 on account of falling oil prices and the effects of the lockdowns on economic activities,” adding: “With shrinkage in oil revenues, debt service payments pose the greatest risk to Nigeria.”

He stressed further that for Nigeria to overcome the pandemic, “taxes must form a significant percentage of government revenue. Digitalization of tax collection and tax administration is critical to ensure greater transparency of the tax system, widening of the tax base, while mitigating compliance risks and encouraging voluntary tax compliance.”

The Ekiti State Governor, Dr. Kayode Fayemi, who was Chairman of the Dialogue, lauded the FIRS “for its performance in the 2020 fiscal year, despite operating in the most challenging period many of us have experienced.

“The Service not only collected N4.9 trillion in taxes, achieving 98% of its target; only 30.6% of this was attributed to Petroleum Profits Tax, from what used to be over 50%.”

However, Governor Fayemi urged participants at the event to “interrogate how Nigeria can further deepen the use of technology to improve tax compliance nationally and across subnationals.”

He stressed that this was important because “a significant proportion of our population will soon come into the workforce” which is “a golden opportunity to introduce first-time taxpayers to their civic responsibility, by adopting technology.”

Similarly, Executive Secretary, African Tax Administration Forum, Logan Wort, harped on the place of technology in generating revenue for the country in a post-COVID economy.

Wort, who joined the Dialogue virtually from South Africa, stated: “Domestic Resource Mobilisation (DRM) is expected to contribute at least 75% to 90% on average per country” in the post-COVID era, adding that Nigeria and other African countries should note that “improved tax revenue will have to take prime position” in the scheme of things.

Wort urged Nigeria to pay serious attention to e-commerce and the digital economy sector where big, trans-national digital conglomerates like Google, Netflix and Uber operate and make huge, tax-free profits as a possible way of increasing tax revenue generation.

He said Nigeria should borrow a leaf from Ghana in e-commerce taxation, which is projected to fetch Ghana $450 million in tax revenue.

In his recap of the keynote address as Chairman of the first panel session, Lagos State Governor, Babajide Sanwo-Olu, urged the AfDB president to support Lagos State as it grappled with the challenges of being the former capital city of Nigeria as well as the issues foisted upon it by the pandemic.

The Minister for Communications and Digital Economy, Dr. Ali Isa Pantami, who chaired the second panel session, stressed that taxpayers should be treated as kings and canvassed better funding of the FIRS.

Nigeria’s first female professor of taxation, Prof. Teju Somorin; President, Association of National Accountants of Nigeria, Prof. Muhammad Mainoma; Member, FIRS Board, Adetola Ehile-Aigbangbee; Group Managing Director, Nigerian National Petroleum Corporation, Mele Kyari; Executive Secretary, African Tax Administration Forum, Logan Wort; Yomi Olugbenro of Deloitte Nigeria; Taiwo Oyedele, Principal Partner, PWC; and Tajudeen Akande of PKF served as discussants on the panels of discussion at the Dialogue.

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