- SGF Mustapha assured of safe investment climate
BY VICTOR NSA – African countries must urgently promote paradigm shift in tax administration to overcome emerging taxation challenges in a digitalised economy.
This is the position canvassed by the Nigerian government and tax experts at the 42nd Technical Conference of the Commonwealth Association of Tax Administrators (CATA) holding in Abuja.
The submission also comes on the heels of the Federal Government assurances that the environment is safe and secure for foreign investors to explore the country’s vast investment opportunities in a mutually beneficial partnership.
Leading the charge for digitalisation of processes and safe investment climate at the CATA conference, Secretary to the Government of the Federation (SGF), Boss Mustapha, said the President Muhammadu Buhari-led Administration has initiated policies aimed at creating a conducive environment for businesses to strive amid the global socio-economic challenges.
He identified some of the actions taken to include reviews on tax policies and legislation targeted at encouraging foreign investment in the country
Mustapha assured that Nigeria would not relent in supporting measures aimed at making tax administration in the continent to comply with best global practices for the overall socio-economic growth and development of member-countries.
Also towing the same line, Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed stressed the need for digitalization and harmonization of tax systems, given that the world is still battling to recover from the negative impact of COVID-19 pandemic.
She said with businesses evolving from physical presence to virtual place, tax administrations must also shift gear unto the virtual realm, adding; “Over the past few years, our government committed huge monetary and human resources to champion the cause of developing countries.
“It is important for CATA and similar organisations to blend their voices with ours to insist that skewed international tax rules be straightened for the good of all.”
Describing the theme of this year’s conference, “Tax Administration in a Digital Era”, as very apt and timely because the business world has moved away from the “brick and mortal” model unto the fast-paced, globalised and digitalised model, Mrs Ahmed said tax administrative processes must ultimately keep pace with changes in the business world.”
While referencing an African adage that says “where the hunter has learnt to shoot without missing, the birds that would avoid the hunter’s soup-pot must learn to fly without perching”, the Finance Minister lamented that tax administrations of most developing countries are based on manual processes.
“In these tax administrations, ICT function is limited to provision of hardware and basic software in support capacity. Whereas, automation, large data, artificial intelligence and machine learning capabilities is central to effective tax administration. Such capabilities will enable tax authorities to do e-invoicing, pre-populate tax returns, carry out automated tax risk profiling, etc”, she noted
For Mrs Ahmed, with many new things emerging in the field of taxation, particularly taxation of multinationals, ” Tax administrations must continually upscale the skills of their employees so that they can effectively and efficiently handle emerging tax issues.
“As such, tax officers must be trained and retrained on tax technicalities (including the new international tax rules) and the social effects of taxation.”
In his remarks at the event, Executive Chairman of Federal Inland Revenue Service (FIRS), and President of CATA, Muhammad Nami, said the Forum is a gathering of tax administrators, practitioners and the global tax fraternity with the aim of proffering solutions to contemporary tax issues.
He said to assist members engage actively in the ongoing discourse around digital economy taxation, CATA has collaborated with some regional tax organisations to organise consultative meetings/workshops facilitated by the Organization for Economic Cooperation and Development (OECD).
Nami said; “In recent times, there has been an upsurge of disruptive technological innovations in the business environment. These have triggered peculiar issues that tax authorities are grappling with. The business world is in a state of flux; while the character of data and its management keeps changing.
“Consequently, tax administrators are under compulsion to align their mandates with the changes arising from technological advancements”.
Further reflecting on the significance of the event, the FIRS boss said; “In matching the pace of advancement in technology, tax administrators must remain bound by the laws, regulations and codes that safeguard the sourcing, storage, processing and management of data.
“In diverse ways, all members of CATA have to deal with the challenges that transformational technology has brought to the commercial space and stay ahead of the conversation.”
