By Bamidele Johnson
It is hardly debatable that a major challenge faced by Nigeria is her inability to optimally generate revenue needed for infrastructural and human capital development needs from the vast range of activities in her economic space. That the country is as a paradox is hard to miss: Africa’s largest economy is confronted by inability to mobilise revenue domestically, leaving her tax-to GDP ratio at 5.9 per cent. Ghana and Egypt are at 16%, with Morocco and South Africa at 22 and 27 per cent respectively.
This deficit has been worsened by many factors, notably near-total dependence on resource-based revenue, a famously volatile source; squalid voluntary compliance rates and poor revenue collection processes, leaving ample room for leakages.
At the launch of the Federal Government’s Strategic Revenue Growth Initiatives (SRGIs) in Abuja last week, the Minister of Finance, Mrs Zainab Ahmed noted that the Federal Government is making progress in domestic revenue mobilisation, especially now that oil revenues have dipped.
In a bid to accelerate the progress, the minister disclosed that the Federal Government has constituted eight Tax Appeal Tribunals (TATs) to speed up the resolution of over 200 pending tax revenue-related cases totalling $18.804 billion, N205.654 billion and €0.821 million.
In addition to accelerating the resolution of disputes, explained the minister, the TATs are a platform conceived to ensure taxpayers involved in such disputes get fair hearing. The dispute resolution system has the potential to bring about a huge reduction in the prevalence of tax evasion, raise taxpayers’ trust in the process by ensuring fairness.
In addition to the initiative, the Federal Government, said the minister, will deploy modern technology to grow revenue base, improve collection methods and ensure collaboration among revenue-generating agencies.
In the modern era, this is the way to go. With vast amounts of data available to agencies such as the Nigeria Customs Service, Securities and Exchange Commission, Nigeria Immigration Service, Federal Airports Authority of Nigeria, Corporate Affairs Commission, Central Bank of Nigeria and Land Registries among others, the potential for an appreciable leap in revenue mobilisation is huge.
“Given the span of stakeholders that form our port community and for the sake of improving ease of doing business, we plan to deploy a national single window/trade platform that we expect to enhance customs collections to about 90% over a few years. We will also improve collaboration between our revenue collection agencies including the Nigerian Customs Services (NCS), Federal Inland Revenue Service (FIRS) and other trade partners to share information and intelligence that will help improve revenue and make collections more efficient,” the minister stated.
Running alongside these initiatives is the digitalisation of the revenue collection process, which the minister pledged to continue championing as a requirement for the government’s revenue drive.
Digitalisation has increased automation of revenue collection processes. This has found manifestation in healthpay in the health sector, edupay in education and e-Collections by revenue authorities, measures that have yielded unprecedented leap in collection.
These follow the pattern of the various innovations introduced by the Federal Inland Revenue Service (FIRS), which has deployed its e-Services platform, resulting in the automation of the tax process from registration to collection of Tax Clearance Certificate (TCC). The FIRS has equally automated the collection of Value Added Tax (VAT) in major sectors. With digitalization, tracking of revenue performance on a month-by-month basis provides the opportunity for greater accuracy of historical trends as well as in determining revenue targets for major generating entities towards improving performance.
In similar vein, there seems to be a renewed commitment towards up-skilling revenue collection and administration personnel as well as providing them with necessary tools. Investment in capacity building can bring only one outcome: higher performance level