ELECTRONIC SYSTEMS FOR TAX ADMINISTRATION AND COMPLIANCE

ELECTRONIC SYSTEMS FOR TAX ADMINISTRATION AND COMPLIANCE

The Federal Inland Revenue Service (FIRS) introduced the e-tax system in partnership with the Nigeria Inter-Bank Settlement System in 2015, which marked the official start of Nigeria's transition to an electronic system (NIBSS). Since that time, the tax system has been gradually moving to online platforms, with the creation of an online portal where Withholding Tax (WHT) credit notes and tax receipts can be viewed and downloaded as well as where the application for Tax Clearance Certificates (TCCs) for Companies can be finished. Taxpayers can also pay different taxes by withdrawing money from their bank accounts.

Regarding the submission of TCC applications by businesses, the switch to an online platform gave businesses the option to submit their yearly TCC applications while remaining at their desks. A number of trips to the FIRS office are necessary to process and ultimately issue the TCC under the original electronic method, which needed an initial online application. Nearly all of the advantages of using an online application are lost because of this demanding follow-up process.

In order to impose social distancing and stop the virus's transmission during the Covid-19 epidemic, technology has become more important. For instance, many hospitals now use technologies for remote diagnosis and treatment of patients.The way we live now is entirely different thanks to technology. With technology advancements in every part of the value chain, the way goods and services are offered has significantly improved. There are always new tools or goods on the market to make tasks that have been accomplished with a fair amount of ease even simpler.

In some jurisdictions, like Lagos State, Port Harcourt, and Ogun State, among others, the state tax authorities require that Annual PAYE Tax returns be submitted online. This was implemented in Lagos State at the start of 2019 and has done away with the need for lengthy lines and any other physical interaction necessary to file personal income tax returns in compliance with the law.

As governance and administration must continue, Nigerian tax authorities are looking into methods to use technology to enhance administration and compliance. However, Tax audits and investigation exercises that involved physical visits and review of documents to establish additional taxes due to the Government could not be carried out, thus the resort to E-tax filings.

NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com

WRITTEN BY CHAMAN LAW FIRM TEAM

EMAIL: chamanlawfirm@gmail.com

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