A digital taxation model for Nigeria: standardizing collection through technology integration

Abstract

This paper introduces a digital taxation model for Nigeria, aimed at standardizing tax collection through advanced technology integration. The model addresses the critical need for modernizing Nigeria’s tax administration to enhance efficiency, accuracy, and compliance in tax collection processes. By leveraging digital technologies, the proposed model seeks to streamline tax administration, reduce manual errors, and improve overall tax revenue management. The model advocates for the implementation of a comprehensive digital tax infrastructure, including the development of an integrated tax management system, digital payment platforms, and real-time data analytics tools. This approach emphasizes the use of application programming interfaces (APIs) for seamless interaction between tax authorities, financial institutions, and taxpayers, ensuring a unified and efficient tax collection system. Blockchain technology is proposed to enhance transparency and traceability, providing an immutable ledger for all transactions, which helps in mitigating fraud and increasing taxpayer confidence. The digital taxation model also includes automated compliance monitoring and reporting systems that utilize artificial intelligence (AI) for predictive analytics and risk assessment. These systems are designed to identify discrepancies, flag potential non-compliance issues, and provide actionable insights to both tax authorities and businesses. Additionally, the model emphasizes the importance of taxpayer education and support, advocating for user-friendly digital platforms and resources to facilitate smooth adoption and compliance. Expected outcomes of the model include increased tax revenue through improved compliance and reduced tax evasion, enhanced operational efficiency for tax authorities, and a more transparent and equitable taxation process. By aligning with global best practices and integrating cutting-edge technologies, the digital taxation model aims to transform Nigeria’s tax administration landscape, fostering a more robust and reliable financial system.