posted on 2024-09-05, 20:59authored byAbdulsalam Mas’ud, Sani Damamisau Mohammed, Yusuf Abdu Gimba
Recently, there has been an expansion in the deployment of digital systems and digital IDs
among taxing authorities. However, little is known about the extent to which such
technologies are being adopted, or about whether the data from them is being used
strategically to improve tax administration. Even less is known about this in the context of
subnational tax administration, although this could be very relevant in some contexts, such
as Nigeria. This study investigates the extent of the adoption and strategic usage of data
from e-tax systems and digital IDs among state internal revenue services (SIRSs) in Nigeria.
Data was collected through qualitative interviews conducted within the SIRSs – one from
each of the country’s six geopolitical zones, and within the Federal Inland Revenue Service
(FIRS). The qualitative data from the interviews was evaluated using thematic analysis. The
findings revealed that there is scope for improvement in the adoption and usage of data from
e-tax systems and digital IDs among the SIRSs. It was also found that the extent of adoption
and strategic data usage from e-tax systems by SIRSs likely improves states’ per capita
internally generated revenue (IGR), but similar insights on the impact of digital IDs have not
been obtained. Lastly, it was found that there are some lessons SIRSs could learn from FIRS
in terms of strategic use of data from e-tax systems and digital IDs. Specifically, SIRSs need
to integrate an audit risk engine and machine learning for performing analytics into their e-tax
systems, and also automate the estimation of annual credits for withholding tax suffered, tax
refunds and penalties, as well as tax audit management including case selection, allocation
of auditors and generating audit reports. Some policy recommendations are offered that are
consistent with these findings.
History
Publisher
Institute of Development Studies
Citation
Mas’ud, A.; Mohammed, S. D. and Gimba, Y.A. (2023) 'Digitalisation and Subnational Tax Administration in Nigeria', ICTD, African Tax Administration Paper 29, Brighton: Institute of Development Studies, DOI: 10.19088/ICTD.2023.031