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COVID-19: States’ tax revenue fell by 40% in 2020 –Govs

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State governments, last year, lost 40 per cent in tax earnings due to the coronavirus pandemic.


Disclosing this in Abuja  at the first Technology & Tax Event seminar organised by the Nigeria Governors’ Forum in partnership with the World Bank and the International Centre for Tax and Development (ICTD), the Director General, NGF, Asishana Okauru, also said weak environment for tax policy and tax legitimacy, as well as low technological integration in tax administration, undermined efforts to mobilise domestic revenue and the capacity of tax authorities to collect taxes efficiently.


Okauru, who said COVID- 19 had pointed to the direction that all revenue administrations need to move to a digital future, reminded the participants that many enterprises were accelerating their digital  transformation and cloud strategy.


“The pathways to achieving tax digitisation may vary from state to state, but the conditions remain the same, including providing broadband access and supporting the growth of digital skills in the wider economy. “Amidst this transformation, we also recognise risks of data ownership, data protection and cyber security.


This each government must envisage. It would require a strong in-house IT team and an experienced legal department that will help protect the interest of all parties, including taxpayers,” the DG stated.


He noted that many state governments had taken the path of least resistance by maintaining tax systems that allow them to maximise whatever limited options available to them rather than expanding into digital and more efficient tax systems.


Okauru assured that the NGF would continue to provide opportunities for states to benefit from a global perspective and to ensure no state is left behind. “Overall, digitisation does not only bring about efficiency, but it provides opportunities for more people to be involved.


“2020 did for technology services what the 1930s did for financial services – with the growth in the regulation of commercial, investment banks, stock and commodity exchanges. We believe tax administration should be no different,” he added.


Chairman, Federal Inland Revenue Service (FIRS), Mohammed Nami, advised state governments to look inward on how to improve their revenue base in order to augment the shortfall of allocations from the Federation Account.


Nami stated that Nigeria’s reliance on oil revenue had exposed the country to huge revenue challenges, which resulted in poor budget implementation across the three tiers. He told them that taxation had gone beyond the bricks-and-mortar model, but relies more on data and intelligence which are driven by technology.


“The adoption of technology in revenue administration processes is crucial and a major enabler for enhanced and sustainable revenue generation in a globalised and knowledgedriven world.


“Therefore, revenue authorities at all levels must adopt automated processes and embrace e-solutions both in their internal operations and in dealing with the taxpayers within their respective jurisdictions,” he further advised.


The chairman disclosed that the 145th Joint Tax Board (JTB) meeting harped on the need to further broaden and increase revenue generation at all levels by leveraging on ICT, noting that the adoption of technology will optimise and harness the various taxes and plug revenue leakages.




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