In furtherance to the provisions of the Finance Act 2020 and impressed by the proactive steps adopted by the hierarchy of the Federal Inland Revenue Service (FIRS) to ease tax compliance and modernise tax administration in the country, the leading civil society organisation in Nigeria; HUMAN RIGHTS WRITERS ASSOCIATION OF NIGERIA (HURIWA) has applauded the introduction of a new Tax Administration Solution (TaxPro-Max).
HURIWA said it is aware that through the TaxPro Max, taxpayers will be able to file returns electronically, pay taxes online, get instant credit for withholding taxes deducted from their income, ascertain capital allowance carried forward, loss carried forward to be utilised for subsequent income tax returns, generate tax clearance certificates, respond to tax assessments raised, keep track of outstanding debt and communicate with the FIRS local tax offices on other tax matters.
In a media statement by the National coordinator; Comrade Emmanuel Onwubiko and the National Media Affairs Director; Miss Zainab Yusuf, the Civil Rights group quoted the Executive Chairman, FIRS; Mr Muhammad Nami, as saying that “TaxPro-Max enables seamless registration, filling, payment of taxes, automatic credit of withholding tax and other credits to the Taxpayer’s accounts, among other features.
“The TaxPro-Max also provides a single-view to Taxpayers for all transactions with the Service.
“The TaxPro-Max platform is accessible at www.taxpromax.firs.gov.ng. From June 7, 2021, the TaxPro-Max becomes the channel for filing Naira-denominated tax returns in the country.”
According to him, all taxpayers have been notified that all naira-denominated tax returns are to be filed via the TaxPro-Max Solution in order to generate the obligatory Document Identity Number (DIN).
Describing the one-stop online platform (TaxPro Max) as a laudable effort by the FIRS in ensuring that taxpayers enjoy a seamless tax filing process and also ease compliance, the rights group called on the hierarchy of the FIRS to create more awareness by sensitizing the public on the modalities for implementing the system to fully maximise the benefits in addition to ensuring that data privacy measures are given priority.
HURIWA further noted that in view of the imminent migration from the current manual tax returns filing to the full implementation of automated filing on the platform, there is the need to allow for a transition phase, to ensure that the usual glitches associated with system integration is prevented while recommending for Implementation to be done in batches according to the current local tax office groupings i.e Large Tax Offices (Non-oil), Medium Tax Offices, Micro & Small Tax Offices e.t.c.
“To fully achieve the objective of introducing this innovative approach to tax collection in Nigeria, the FIRS must ensure that sufficient measures are put in place to ensure that concerns raised by users of the platform are promptly attended to and resolved. Overall, it is expected that this initiative, if properly managed, will improve tax compliance in Nigeria by reducing the related costs, time and inconvenience associated with manual returns filing”, HURIWA advised.
Continuing, HURIWA observed that this innovation is timely as over the past decade, there has been a strong global move towards digitalization and most sectors are gravitating towards improving and transforming their business operations. Accordingly, business functions and business processes are leveraging technology solutions to expand the use and context of digitized data. More so, HURIWA revealed that in most economies, tax authorities have also harnessed the benefits of digitalization and enhanced revenue collection through seamless adoption of technology.
HURIWA recalled that as part of the relentless digitization efforts to ease tax compliance and modernise tax administration, the Federal Inland Revenue Service (FIRS) had in 2017 announced the introduction of six (6) new electronic tax services (e-services) for the convenience of taxpayers in Nigeria including:
e-Registration: for the registration of new taxpayers with FIRS
e-Stamp Duty: for the payment of stamp duties on qualifying documents
e-TaxPay: presenting more modern payment solutions for all Federal Government taxes and levies through any of the following platforms – Nigeria Inter-Bank Settlement System (NIBSS), Remita and Interswitch
e-Receipt: for receiving and verifying e-receipts generated after taxes are paid through the e-TaxPay
e-Filing: for taxpayers to file their tax returns online via the website: https://efiling.firs.gov.ng
e-TCC: a platform intended to replace the physical application, issuance and verification of a company’s Tax Clearance Certificate (TCC). Other more recent efforts include the e-filing of transfer pricing (TP) declaration and disclosure forms, country-by-country reporting as well as the VATrac introduced by the FIRS.”
Situating this innovations with what is obtainable in other advance climes, HURIWA expressed its endorsement noting that certainly, there is no better time to evaluate the capabilities of a digital tax system than a period when social distancing and lockdowns are being enforced to curtail the spread of Covid-19, which according to the rights group underscores FIRS’ assurance to taxpayers to improve ease of doing business without disrupting the affected business’ operations.
“The United Kingdom (UK) for instance, has also steadily transformed itself into one of the most digitally advanced tax administrations by successfully reducing the need for filing annual tax return and creating a single view of a taxpayer’s affairs through a portal on the Government website. The UK tax authorities are also able to pre-populate personal tax returns with some information in their database; such as an individual’s earnings and taxes paid.
“Also, their payroll tax system, which was once largely reliant on annual returns, was replaced in 2013 by Real-Time Information (RTI); a solution that involves employers updating Her Majesty’s Revenue and Customs (HMRC), along the same timeline that they pay their employees. The aim is for HMRC to profile each employee accordingly and ensure that the correct amount of tax is collected from individuals at each pay point in the year, thereby reducing the tax gap.
“Globally, governments are using data analytics to help optimize tax collections and monitor compliance initiatives to advance overall efficiency. The exponential use of data analytics in real-time and predictive tax administration will revolutionize the Nigerian tax administration as data can be transformed into a powerful tool to monitor tax compliance”.
Conclusively, HURIWA charged government to promote a compliance culture developed through taxpayer education and simplified digital filing processes. “Online tax services must be robust enough to function as an intelligent solution that can accommodate end-to-end validation, combat tax fraud and police tax returns.
“The journey to fully implementing and reaping the benefits of a seamless e-tax administration system is neither short nor simple.
“There is no one-size-fits-all solution; however, an assessment of the above consideration will enhance the performance of our tax system in Nigeria and ultimately increase government revenue”.