The Finance Act, 2023 undoubtedly is shaking things up by bringing Nigeria Tax system into the 21st century with its provisions! This means that as the world becomes increasingly driven by technology, Nigeria also stands at a pivotal moment where digitalization could vastly improve its tax administration system through the innovation introduced in the Act.
However, are the provisions of the Act a true reality for Nigeria? Are we saddled with requisite technology to bring it into fruition?
The importance of digitalization can not be overemphasized, to make this more relatable, a good analogy is where a small business owner in Zaria, Kaduna state, frustrated by the convoluted tax process, could easily file taxes from the comfort of their home using a simple app developed by the government. This is not wild dream; it is a manifest reality in many developed countries, where technology has streamlined tax processes and improved compliance rates.
For a country like Estonia and the Netherlands which have successfully implemented e-filing systems that allow citizens to submit their taxes online with just a few clicks, reducing the burden on taxpayers and tax authorities alike. If these nations can harness the power of digitalization, why can’t Nigeria the known giant of Africa?
The truth is that the merits of such a transition are undeniable. And yes, digital tax systems can enhance efficiency, reduce administrative costs, and improve revenue collection for the Nigeria government among others. With a robust monitored online platform, the Nigerian government could minimize human error, combat corruption the ultimate cankerworm that eats deep into or nation, and foster a sense of trust between taxpayers and the administration.
Moving on, digitalization will empower citizens, making them more aware of their tax obligations and the importance of contributing to national development. But can we truly expect these changes to take place in Nigeria, where infrastructural deficits and bureaucratic bottlenecks persist and thrive diurnally?
While it is recognized that the path to digitalization is not without its challenges. A few would be touched in this piece for our understanding. Now, a significant hurdle in Nigeria is the lack of reliable internet access, particularly in rural areas, where many small businesses operate. How can we expect a farmer in Kano to file taxes online if they cannot even connect to the internet? When then will the informal sector be captured into the tax net?
Additionally, there is the issue of digital literacy; many Nigerians, particularly the elderly, are not familiar with technology and may feel overwhelmed by the prospect of an entirely digital tax system. The unanswered question is will they be left behind in a rapidly advancing digital landscape? Or, is their small contribution not adding up for the sustainability of our country men welfare?
But, despite these obstacles, the potential benefits of digitalizing tax administration in Nigeria far outweigh the challenges. Learning from a country like Singapore that demonstrated that investing in technology does not only modernize tax systems but also improves public service delivery. Though unnoticed, but the emotional toll on taxpayers grappling with an opaque and cumbersome system is incomparably immense; many feel disillusioned and disengaged from the tax process.
Therefore, by adopting a digital approach, Nigeria is capacitated to enhance compliance and foster a sense of belonging and civic duty among its citizens.
To sum up, digitalization presents an opportunity for Nigeria to revolutionize its tax administration. While this writer has acknowledged the existing significant hindrances, the experience of developed countries undoubtedly offers a blueprint for success.
At this juncture, can we afford to miss out on the benefits that come with embracing technology? The answer lies in our willingness to invest in the future by ensuring that every Nigerian feels empowered to contribute to the nation’s growth and not as a burden but as a partner in country’s progress.
About the author
Kehinde Emmanuel Oladele is a law student at Ahmadu Bello University, distinguished by his passion for legal research and writing. His academic pursuits are focused on the intricate domains of Taxation and intellectual property. He has garnered acclaim through numerous publications addressing pertinent contemporary socio-legal issues. His commitment to scholarly exploration and insightful analysis underscores his dedication to advancing legal discourse.