The plan by the Nigeria Deposit Insurance Corporation (NDIC) and the Federal Inland Revenue Service (FIRS) to spend a combined N8.7 billion on software alone this year has received mixed reactions from stakeholders.
The N8.7 billion is captured in the government-owned enterprises (GOEs) budget for 2024 released by the Ministry of Budget and Economic Development.
FIRS is planning to acquire software with the sum of N3.5 billion to drive its tax reform agenda in 2024.
The amount is the second-biggest budget for software among GOEs, the largest being that of the Nigeria Deposit Insurance Corporation (NDIC) at N5.2 billion.
Other GOEs that plan to acquire software this year are the Nigeria Immigration Service (NIS), with a budget of N874.5 million; the National Pension Commission (PenCom) as well as the Federal Competition and Consumer Protection Commission (FCCPC), which a proposed budget of N384 million and N255 million respectively.
The Executive Chairman of FIRS, Dr Zacch Adedeji, at a recent outing, said the service was undergoing a transformation that will see it rely more on technology to drive its processes.
According to him, the new FIRS will rest on three pillars – people, technology and processes.
“We intend to build a more customer-centric organisation. That way, we can bring more people into the tax net to increase our tax collections without increasing tax rates.
“In our pursuit of a more efficient and contemporary tax administration methodology, we are embracing an integrated tax approach, leveraging technology at every step. This approach positions FIRS at the forefront of innovation, ensuring that we meet the evolving needs of our taxpayers in a rapidly changing world,” Adedeji said.
However, there are concerns that the annual ritual of budgeting billions of naira for software upgrades by ministries, departments and agencies (MDAs) has become a conduit for siphoning public funds.
Reacting to the N3.5 billion budget for software by the FIRS, Professor Godwin Oyedokun of Lead City University said while it is difficult to comment on the budget, especially as the details of the project are not available, anything that will make Nigerians have seamless tax experience is welcome.
Oyedokun, who is also a council member of the Chartered Institute of Taxation of Nigeria (CITN), said if the FIRS would adopt a modern tax process, it would depend heavily on technology.
Also speaking, a former chairman of the Abuja chapter of CITN, Benjamin Ogbeide, said it was understandable that FIRS would need to invest heavily in technology as “this is the way to go”.
“The Tax Promax which they introduced a couple of years ago, though with its bottlenecks, has greatly helped in increasing their tax collections. “You can see they have moved from N8 trillion in 2019 to N12 trillion in 2023 and if we want them to do more. They just have to invest more in technology.”
