The plan by the Nigeria Deposit Insurance Corporation (NDIC) and the Federal Inland Revenue Service (FIRS) to spend a combined sum of 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.
Specifically the FIRS is planning to acquire software with the sum of N3.5 billion to drive its tax reform agenda in 2024.
This amount is the second-biggest budget for software among the government owned enterprises (GOEs), the biggest being the Nigeria Deposit Insurance Corporation (NDIC), with N5.2 billion.
Other GOEs that also plan to acquire software this year, include, Nigeria Immigration Service (NIS), which plans to acquire software with N874.5 million, National Pension Commission (PenCom), as well as the Federal Competition and Consumer Protection Commission (FCCPC), both of which have also budgeted N384 million and N255 million respectively for software acquisition this year.
The Executive Chairman of FIRS, Dr. Zacch Adedeji at a recent outing said the Service is 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.
“Our intention is to build a more customer-centric organisation,” Adedeji said. “That way, we can bring more people into the tax net to increase our tax collections without increasing tax rates.
“In our pursuit for 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.”
However there are concerns that the annual ritual of budgeting billions of naira for software upgrades by Ministries Departments and Agencies ( MDAs) constitutes a major channel of 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 is 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 was going to adopt modern tax methods, it would depend heavily on technology.
Also speaking, a former chairman of the Abuja chapter of CITN, Mr. Benjamin Ogbeide said it is very understandable that FIRS is investing heavily in technology because that is the way to go.
According to him, “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.
“If they are able to invest more in technology they will do much better and even surpass the N19 trillion target they have for this year.”
The National Information Technology Development Agency (NITDA), the nation’s IT regulator, recently acknowledged the loopholes this kind of budgeting creates, and noted that its IT projects clearance system for MDAs is helping to block some of the loopholes whilst saving the government billions of naira yearly.
The Agency also noted that billions of naira are being pushed by MDAs through Information IT projects because they are too technical to be scrutinised by the National Assembly during the budget defence.