Technology is essential to simplifying the tax compliance process in Nigeria

03 April 2019 Consultancy.africa

Despite increasing pressure on public coffers and the expanding need for tax collection, inefficiency and a lack of user-friendly mechanisms are posing a major barrier to paying taxes in Nigeria, according to Head of Tax at global professional services firm PwC Nigeria Taiwo Oyedele. He posits technology as the solution to this problem.

As one of the largest economies in Africa, Nigeria is increasingly progressing towards higher degrees of economic prosperity, although the government is struggling to benefit from this growth in the current scenario. According to Oyedele, the country’s “revenue to GDP ratio” is at the lowest end of the global spectrum.

Oyedele attributes this high rate of default to the difficulty that Nigerian citizens face in paying their taxes, something that is simultaneously acting as a barrier to other government efforts to solve the problem. “It is a contradiction: you need tax money but you make the process very difficult,” he says.

Currently, the use of digital applications to pay taxes is among the payment options. Oyedele recommends that technology should be made the sole avenue through which tax is collected and administered, thereby making the process of calculation, payment, and filing for returns more efficient.

Technology is essential to simplifying the tax compliance process in Nigeria

In addition, using technology is expected to reduce the costs of paying taxes in the long run, due to what Oyedele terms as “cost of compliance.” “It is actually the money the taxpayer pays that doesn’t get to the government. So, both the taxpayer and the government have an objective to reduce that cost,” he said. 

Oyedele was speaking at the Tax Academy Clinic, and urged tax authorities in the country to enforce reforms in the system. These would be over and above the reforms introduced under the previous Minister of Finance, who initiated the Voluntary Assets and Income Declaration to reduce default rates.

Technology is the key according to Oyedele, and he pledged that PwC would support in the process of integration. “In the past, getting your tax clearance certificate used to be like rocket science.When you need it to buy a plot of land or get a contract, getting the TCC is difficult. With technology now, one should be able to get that immediately,” he said.

“We know that these platforms are not perfect yet; so, our role as PwC, helping so many people to pay their taxes and also paying taxes ourselves, is that once we identify what the problems are, we get the stakeholders to come together to see how we can fix the problems,” he added.

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Collaboration with South Africa could drive digital integration across the continent

26 March 2019 Consultancy.africa

According to analysis from professionals at Big Four accounting and advisory firm Deloitte, policies being implemented in South Africa to promote Industry 4.0 integration are likely to have a positive impact across the rest of Africa as well, primarily due to the collaborative opportunities that are likely to follow. 

Deloitte’s overview of the market is based on analysis in its Tech Trends 2019 report, which examines the latest in technology across South Africa. The President of the country Cyril Ramaphosa has recently initiated a presidential commission to ensure South Africa’s competitiveness under the new industrial revolution.

A number of key transformations are expected to follow as a result, which include the development of intelligent interfaces, the emergence of organisations that operate entirely in the artificial intelligence domain, as well as unprecedented increases in connectivity and marketing opportunities.

Collaboration with South Africa could drive digital integration across the continent

The last of these trends is likely to translate into economic benefits for countries across Africa. The continent is rapidly moving towards connectivity, and is expected to be home to as many as 1 billion mobile internet connections by 2021. Alongside the consumers, businesses in the region are also embracing the wave of digitalisation. 

Reports have suggested that countries such as Nigeria and Kenya are likely to have thriving markets in digital services domains such as cloud computing and cybersecurity, which is brought about by a increasing propensity to spend on digital transformations, even amongst small and medium enterprises.

Prior to the realisation of this interconnected environment, however, experts have urged that the regulatory and business environment within South Africa must be rectified and made more conducive to digital growth. For instance, in the current scenario, an increase in automation will necessarily translate into severe unemployment in the country, unless appropriate skills are developed.

Commenting on the scenario, Kevin Govender, Associate Director at Deloitte Consulting in Africa said, “I think South Africa is an emerging country and has other challenges that first world countries don't have. So there is an opportunity to take those challenges, use innovation and technology with some of these key trends, and how do we transform and grow this economy, this economy as a whole and businesses.”