With government spending rising, it is important for revenue administrators to devise ingenious means of improving tax collection. One sure way of doing so is automation of the tax collection process.
Recently the Federal InlandRevenue Service (FIRS) announced ongoing efforts to automate tax collection by 2014 with the Integrated Tax Administration System (ITAS) to be implemented on a tailored made solution known as the Standard Integrated Government Tax Administration System (SIGITAS).
The primary goal of this project is to re-engineer the tax administration service delivery, eliminate gaps and redundancies in the current administrative assessment processes by leveraging technology in line with global best practices ultimately leading to simpler taxpayer compliance.
The objective is to transform the tax administration systems. Optimize its contribution to national development.Broadly speaking, automation of the tax administration process will engender transparency and efficiency with little human interface.
The most vital aspect of SIGITAS will be to widen the tax net, deepen compliance, create a friendlier environment for taxation as well as curb leakages in tax administration. Also, the introduction of SIGITAS will standardize processes which mean reduced turnaround times for service offerings to taxpayers.
A major highlight of the deployment of SIGITAS is the automation of unified communications and enterprise collaboration, document management portal, as well as the automated Value added tax collection system. ITAS is also primed to support taxpayers in complying with regulations by reducing the administrative burden on them and providing easy access to information as and when due.
It is expected that by the time ITAS is deployed taxpayers will be able to view their entire tax history of filing and assessment with the FIRS.
In order jurisdictions
where SIGITAS had been introduced such as Mali and Rwanda, taxpayers are able to use the platform as a one stop shop- with easy integration of all tax types- registering a tax ID, data of transactions etc. SIGITAS also has the capacity to handle a robust framework for tax roll, assessment, collection, audit, objection appeals, document handling, reporting, external system integration, system administration and accounting for each user.
Instructively SIGITAS offers a platform for taxpayers and tax authorities to interact in a more transparent and confidential manner, while also providing valuable information for the taxpayer.
The deployment of SIGITAS should be encouraged by all stakeholders for many reasons. It will among other reasons reduce the country’s over-dependence on oil revenue with an expected surge in non oil taxes raising revenue figures needed for the development of social infrastructure.
Also it is expected that the ITAS will signal a re-orientation of the FIRS personnel in terms of skills and capacity in the business analysis function to meet the objectives of the institution as well as strengthen the governance and transparency with fair and equal treatment of taxpayers. And to suit Nigeria’s ethnic diversity, it can be configured to be multilingual and offers a water tight security protection.
But for SIGITAS to be successful there is need for synergy and integration with other similar projects across revenue generating institution such as the recently deployed Taxpayer Identification Number (TIN) for clearing of all imports into the country. This essentially brings importers into the loop of both the FIRS and Nigeria Customs Service simultaneously.
This has impacted positively on the revenue collection profile into the federation account. So also for the Taxpayer Identification Number (TIN) integration currently ongoing nationwide which is being supervised by the Joint Tax Board (JTB). The FIRS also needs to build momentum in the synergy with the Corporate Affairs Commission so as to integrate their processes especially in the area of database building which makes it easier to reach the untaxed or “hard to tax”.
A successful ITAS project will be one that is able to create value for all stakeholders by simplifying taxpayer compliance processes, keeps pace with technological innovations, lowers cost of collection with seamless data and exchange of information synergy with key stakeholders (MDAs, banks etc) and support regulatory demands in a simplified manner. It willalso effectively encourage self-assessment filing of tax as against administrative assessment.
In summary, ITAS appears to be the answer to shoring up non oil tax in the face of dwindling oil revenues. A robust technology driven tax administration will definitely be able to achieve more if it fully optimizes the latent power it holds.
The future of Nigeria’s social and economic development depends on a transparent and fair tax collection system that must keep improving to meet with social and infrastructural challenges.