Nigeria’s Tax System Under Scrutiny: The Urgent Need for Reform

In a meeting of the Joint Tax Board in Abuja, the Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, emphasized the urgent need for a comprehensive overhaul of Nigeria’s tax system.

The call for reform comes as tax collection figures at the sub-national level approach the N2 trillion threshold.

Adedeji highlighted the critical role of a well-designed and managed tax system in not only generating revenue for the state but also in fostering investment, promoting social equity, and driving sustainable economic growth.

He stressed the importance of embracing digital transformation to streamline tax processes and enhance revenue generation.

The theme of the summit, “Optimising tax administration: Leveraging harmonisation of taxes via digital transformation,” underscores the importance of adopting technology in a 21st-century world to improve tax administration.

Adedeji emphasized the need for tax authorities to position themselves as hubs for pioneering ideas and innovative approaches to tax administration.

However, Nigeria’s fragmented and complex tax system poses challenges to compliance and revenue optimization.

To address these issues, Adedeji called for the simplification of the tax system, the need for coherence, harmony, and synergy, and the need to leverage technology.

The call for reform comes at a crucial time, as Nigeria seeks to navigate the complexities of the global economy.

By streamlining tax processes, enhancing transparency, and embracing digital transformation, Nigeria aims to unlock the full potential of its tax revenue and foster economic development.

The adoption of technology and innovative approaches to tax administration will be instrumental in driving efficiency, promoting accountability, and ensuring the equitable distribution of tax burdens.

Only through comprehensive and forward-thinking reforms can Nigeria truly harness the full potential of its tax revenue for sustainable economic growth and development.