TECHDIGEST – The ambitious move by the Federal Inland Revenue Service (FIRS) to embrace the digitization of tax processes has continued to gather momentum after the Nigerian government reiterated its commitment to a digital economy.

A digitalized tax administration refers to using advanced platforms to enable real-time or near real-time collection and analysis of detailed taxpayer data.

According to experts, a digitalized tax administration process will block revenue leakages and revolutionize revenue generation for Nigeria.

It will also put a stop to illicit financial outflows from the country and enforce tax compliance among multinationals operating in the country.

TechEconomy gathered that Nigeria may have lost about $178 billion (about N5.4 trillion) to tax evasion by multinationals in ten years.

“Nigeria’s economy is fast digitalizing and digitalization of the Nigerian economy means that the ways and manners of organizing and doing businesses have changed,” Professor Yemi Osinbajo said on Thursday.

Professor Yemi who was represented by the Executive Chairman of the FIRS, Muhammad Nami, at the recent Chartered Institute of Taxation of Nigeria’s (CITN) 24th Annual Tax Conference, said the government will continue to heavily invest in the automation of tax administrative processes and digital infrastructure.

Professor Osinbajo noted that the theme for the tax conference, “Global Disruption, Taxation, and Digitalisation: Implication for Socio-Economic Development” aptly captures the prevailing realities within the national and global digitalization.

“Indeed, the radical changes brought about by digitalization have displaced the traditional approach to tax administration. Consequently, the digitalization of tax administration is unavoidable.

“He revealed the government has provided the enabling environment for a digitalized tax administration by making the necessary tax policy changes.

Additionally, he said, the government is also developing rules for taxation of the digital economy, enactment of required legislation, and providing necessary political backing for the team negotiating the new international tax rules for the digitalized economy.

However, the Vice President urged the institute to see its role in society as a pillar of the country’s socio-economic development.

“The possible impact of non-compliance by taxpayers—whom you hold briefs for—on the government’s revenue and the larger society is crucial and must be given topmost priority while holding briefs for them.

“In doing so, you must always bear in mind the pronouncement of the Court of Appeal in Phoenix Motors v. National Provident Fund Management Board (1993) that it is in the best interest of the society at large that government be in revenue.“

It is through this prism that I see your Institute as a pillar for the socio-economic development of Nigeria and the emancipation of the downtrodden of our society.

Without a doubt, your members will continue to discharge the solemn and sacred responsibility of ensuring that the interest of the larger society in Nigeria is not trodden upon; and this you must do with patriotic zeal,” he noted.

Source: Techeconomy.ng

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TECHDIGEST – Over the last few years, concerns have been raised by stakeholders that the existing international tax system does not properly capture or take into consideration the digitalization of business transactions. Undoubtedly, the world economies are quickly moving from physical assets to digital ones. Online transactions, e-commerce, cryptocurrencies, and now digital taxation.

Some months ago, the federal government in Nigeria disclosed that it would charge offshore companies providing digital services to local customers in Nigeria, saying a six percent tax on turnover would be charged as provided in the 2021 Finance Act.

The Nigerian Investment Promotion Commission (NIPC) had stressed that the Nigerian digital economy was expected to generate $88 billion and create three million new jobs by the end of 2021.

Nigerians spend more money online and via mobile transactions than ever before. That has shifted business emphasis to digital sources of revenue and digital channels. The growth of the digital economy has drawn the attention of state authorities to digital products and services. In particular, numerous controversies have arisen regarding tax regulations.

For the Federal Inland Revenue Service (FIRS), its mandate is to increase tax revenue collection at the national level which is currently one of the lowest in the world in terms of tax to GDP ratio. Hence, the leadership is expected to introduce reforms that will make the tax system more efficient and more result-oriented.

The FIRS Executive Chairman, Muhammad Nami, a thorough-bred tax, Accounting & Management professional, has announced a target of 100 per cent automation of tax administration processes before the end of this year.

Speaking as the Special Guest at the Pedabo 2022 Annual Public Private Sector Engagement, Nami noted that by virtue of the amendment to Section 25 of the FIRS (Establishment) Act in the 2021 Finance Act, any person who fails to grant the Service access to its information technology systems to connect to its automated tax administration solution is liable to certain penalties under the law.

He went further to state that in 2022, the Service will give priority to the collection of taxes from the digital economy, and that it will deploy technological tools in assessing entities that fall within the Significant Economic Presence (SEP) threshold and relevant turnover will be generated for Nigeria.

Meanwhile, over the years, FIRS has found it extremely difficult to tax non-resident companies in Nigeria on profits derived from here, the question of whether a foreign company is liable to income tax in Nigeria is often controversial.

Thus, Section 13 of Companies Income Tax Act (CITA) implies that a non-resident company must have physically-situated activities in Nigeria, directly or indirectly, before such a company can be liable to income tax in Nigeria.

In his statement, the FIRS boss noted that
“With the amendment of Section 10 of the VAT Act by the Finance Act 2021, we will implement the published Guidelines on the Simplified Compliance Regime on VAT for Non-Resident Suppliers, to collect VAT on digital supply of services and intangibles to Nigeria.

“The Service has deployed a digital service interface, the Digital Economic Compliance (DEC) Tool, to facilitate the implementation of the regime.

“The implementation of the DEC Tools will also assist the Service in determining entities that fall within the SEP threshold and relevant turnover generated from Nigeria. This tool will go live shortly,” he said.

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TECH DIGEST – The Nigerian Communications Commission (NCC) and its sister agencies under the Ministry of Communications and Digital Economy is seeking collaboration with the Federal Inland Revenue Service (FIRS) in relation to the Finance Act 2020.

The collaboration becomes necessary going by the inter-agency committee set up by the Minister of Communications and Digital Economy, Dr. Isa Pantami to discuss critical areas of synergy for the implementation of key provisions in the amended Finance Act 2020 as they affect the operations of the agencies in the ministry.

The inter-agency committee is chaired by the Executive Vice Chairman (EVC) of the Nigerian Communications Commission (NCC), Prof. Umar Danbatta. Other members of the committee are the Executive Chairman of FIRS and heads of agencies in the Ministry of Communications and Digital Economy.

Speaking at the interactive session held by the Committee yesterday, the Chairman, Prof. Danbatta stated that the objective of the interactive session is to deliberate on areas of collaboration between agencies in the ministry and FIRS for the common good of the economy.

Also speaking, FIRS Executive Chairman, Muhammad Nami, said: “we have come here to emphasize the need for cooperation and collaboration among the various agencies in terms of revenue generation in order to move the nation forward.”

Accordingly, heads of agencies in the ministry in attendance at the meeting made their contributions with respect to the implementation of the new finance law. They are the Post-Master General, Nigeria Postal Service (NIPOST), Dr. Ismail Adewusi and the Director-General, National Information Technology Development Agency (NITDA), Kashifu Abdullahi.

Other contributors during the interactive session include the Managing Director, Galaxy Backbone, Prof. Muhammad Abubakar; Managing Director, Nigerian Communications Satellite Limited (NIGCOMSAT), Dr. Abimbola Alale and the representative of the Director-General, National Identity Management Commission (NIMC) and Dr. Nonye Nwachukwu, Director, Planning, Research and Statistics at the ministry.

Two sub-committees were later formed to deliberate on specific areas that require further dialogue for effective collaboration towards the implementation of the new tax law as it affects agencies under the Ministry of Communications and Digital Economy.

They are the committees on FIRS/NIPOST and on FIRS/NITDA. The two committees are expected to complete their assignment and make recommendations for consideration by the Minister of Communications and Digital Economy.

On December 31, 2020, President Muhammadu Buhari signed the Finance Bill 2020 (now Finance Act) into law. The new law which introduced over 80 amendments to 14 different laws took effect from January 1, 2021.

Some of the amendments have implications for agencies under the ministry, especially regarding the provision of information for tax purposes and deployment of technology for tax operations in the country, among others.

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TECH DIGEST – Participants at the Nigeria e-Government Summit 2020 have stressed the need for early adoption of technology and increased ICT infrastructure across the country to promote economic growth and e-Government.

The summit, which was held in Lagos recently and organised by DigiServe, had the theme : COVID-19: Impetus for Accelerated e-Government Adoption.

The Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami, who was represented by the Coordinating Director, FIRS, Mr. Femi Oluwaniyi, said the COVID-19 pandemic, even though it took the world by surprise, brought about the importance and need for technology adoption that would keep citizens in tune with the new normal, where meetings and conferences are now held online and government activities are more accessible online.

According to Nami, “There is need for early adoption of emerging technologies to improve governance and also improve the lives of Nigerians. Small businesses like Small and Medium Enterprises (SMEs), need to be empowered and government must begin to provide ICT infrastructure that could be leveraged by SMEs to further grow the Nigerian economy digitally.”

He said FIRS was already at the forefront of technology adoption in providing seamless services for tax payers, through the e-Tax and other initiatives of the FIRS.

The Governor of Lagos State, Babajide Sanwo-Olu, in his keynote address, discussed the importance of technology in developing the Nigerian economy and e-Government across different states of the federation.

The governor who was represented by his deputy, Dr, Obafemi Hamzat, explained how the state is deploying 3,000km Lagos Metro Fibre cables in order to address the shortfall of broadband infrastructure in the state, designed to boost high speed broadband connectivity across the state. “Lagos State will continue to provide leadership for the adoption of relevant technologies that will enhance e-Government and Information Technology (IT) infrastructure spread across the state,” Sanwo-Olu said.

The Executive Chairman, DigiServe Network Services, and convener of the e-Government summit, Mr. Lanre Ajayi, said: “Technology evolution has made it easy for government service delivery and no government can survive effectively without technology application. Nigerians therefore need technology to leverage e-Government services.”

The Executive Vice Chairman of the Nigerian Communications Commission (NCC), Pro. Umar Garba Danbatta, said NCC would continue to deepen broadband penetration across the country to enhance high speed broadband connectivity.

According to him, as at September this year, NCC increased broadband penetration to 45.43 per cent, up from a paltry six per cent broadband penetration in 2015.

“Telecoms subscription has reached 205 million and internet subscription has reached 150 million, with over 80 million Nigerians having access to high speed internet access. But in all of these, effective security must be put in place to guard against associated risks, which can affect e-governance, if not checked. NCC is therefore working hard to address cyber insecurity through the establishment of the Computer Emergency Response Team (CERT), in collaboration with other agencies, to deal with cyberattacks,” Danbatta said.

The Secretary to the State Government of Akwa-Ibom State, Dr. Emmanuel Ekuwem, who represented Akwa-Ibom State Governor, Emmanuel Udom, gave instances how the state government is leveraging technology to provide healthcare and education services across the state.

“Through technology, the state was able to establish remote healthcare services, where medical practitioners attend to patients in remote locations of the state, without physical contact. The same goes to the education sector where the state is leveraging technology to promote online education in the state,” Ekuwem said.

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TECH DIGEST – The Nigeria e-Government summit is scheduled to hold in Lagos on November 17.

Discussions and paper presentations at the summit will address the effect of COVID-19 on the Nigerian economy and help retool the economy for accelerated deployment, designed to boost government’s online presence.

The Executive Chairman, Federal Inland Revenue Service (FIRS), Mr. Muhammad Nami would be joined by some members of the management team including Dr. Zainab Gobir, who is expected to deliver the keynote address.

Executive Vice Chairman, Nigeria Communications Commission (NCC), Prof. Umar Garba Danbatta and the President, Association of Telecoms Companies of Nigeria (ATCON), Mr. Olusola Teniola, are among other notable Nigerians, who will be discussing new e-Government strategies and policies at the Nigeria eGovernment Summit.

Other keynote speakers include: Chairman, Governor’s Forum and the Governor of Ekiti State, Dr. Kayode Fayemi; Board member MTN and former Minister of Communications, Dr. Omobola Johnson; Managing Director, GMT Energy and Chairman NAHCO, Dr. Sehinde Oladapo;

Lagos State Governor, Mr. Babajide Sanwo-Olu, is the chief host.

The annual Nigeria eGovernment Summit, scheduled to hold at Sheraton Hotels and Tower, Ikeja, has the theme: COVID-19: Impetus for Accelerated Adoption of eGovernment.

Different panel sessions have been lined up with sub-themes like: The Roles of Government Agencies in Advancing the National eGovernment Plan; The State of eGovernment and Critical Success Factors in Specified Countries; Positioning Telecoms Infrastructure for eGovernment Deployment; Partnering Government for Development of Sustainable eGovernment Services; Datacentre and Co-location Infrastructure as Enabler of eGovernment Deployment, among others.

The Executive Chairman, DigiServe Network Services, and convener of the summit, Mr. Lanre Ajayi​​​​​​​, said: “We are assembling world-class technology experts and solution providers to share their experiences and showcase latest innovations applicable to eGovernment service deployment.

We are also inviting top government officials not only to learn from experts but also to share their own experience and showcase the state of eGovernment services deployment in their respective governance domains.”

Ajayi noted that technologies have served Nigerians very well in the trying period of the pandemic in many more areas including governance, such that governments now hold cabinet meetings online and taxes are now be paid online.

He however expressed worries over the slow rate of adoption of technologies in governance.

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