The Federal Inland Revenue Service (FIRS) announced through its social media accounts on 2nd January, 2023, that taxpayers now have the convenience of obtaining their Tax Clearance Certificate (TCC) with a single click on the TaxPro Max platform, eliminating the two-week waiting period stipulated in the tax laws. This is one of the most recent benefits offered to taxpayers since the introduction of the TaxPro Max platform in June 2021. While this development is promising and can be improved over time, its success can only be measured by the number of taxpayers who can effortlessly obtain their TCC through a single click, without encountering significant technical or bureaucratic challenges associated with the TaxPro Max platform.
In 2020, the outbreak of the COVID-19 pandemic led to a temporary suspension of all movement, which made it difficult for taxpayers to file tax returns. The physical constraints in meeting tax filing deadlines prompted the FIRS to grant several extensions and introduced the TaxPro Max platform. Essentially, the TaxPro Max is a tax administration solution launched by the FIRS to simplify tax compliance and digitalize the tax administration process in Nigeria. Its features include e-registration, e-filing, e-payment, and obtaining TCCs.
This article evaluates the overall impact of the FIRS' TaxPro Max platform on tax administration in Nigeria, with specific considerations to certain parameters represented under different sub-headings, to determine whether the platform has effectively improved the tax compliance process or if its implementation has imposed additional burdens on taxpayers. The parameters considered include:
a) Convenience and Ease of Compliance
The most notable benefit anticipated by all and sundry is the enhanced convenience TaxPro Max should offer for tax compliance. Taxpayers can now file returns and pay tax liabilities digitally on the platform from any physical location. This reduces the need for in-person interactions and the cost of visits to tax offices, thereby conserving scarce resources. The length of the tax compliance processes is shortened and the risk of human error is potentially mitigated by the ability to file returns and pay taxes online. The platform is also generally easy to navigate for all taxpayers, although some taxpayers have opined the platform is too pedantic on the details required to file tax returns under a self-assessment regime.
b) Centralized System for Tax Collection and Management
The platform provides a centralized system for the collection and management of taxes payable to the Federal Government, allowing taxpayers to make and track tax payments in real time. Taxpayers also have easy access to their tax information as needed, contributing to improved management of the taxpayer database. This simplifies the government's ability to expand and enhance the quality of taxpayer information. In addition, the data obtained from the database can be challenged by taxpayers, ensuring accountability and responsible handling of tax administration by the FIRS.
The above notwithstanding, some taxpayers have expressed displeasure in that tax payment cannot be expressly finalized with their banks, without liaison with the FIRS to generate Payment Reference Number (PRN) or Document Identification Number (DIN), in order to facilitate such payments. Undoubtedly, this may have adversely impacted the ease of payment of taxes by taxpayers, thereby impacting on the collection of the government since adoption.
c) Improved Tax Compliance
The TaxPro Max Platform has played a significant role in promoting tax compliance over time. Recent collection reports from the FIRS indicate a consistent increase in revenue collection each year, which can be partially attributed to the implementation of the TaxPro Max and reliance on technological advancements. TaxPro Max also helps users access basic information about tax laws and regulations, in order to keep track of their compliance requirements. The platform maximizes tax revenue collection and promotes taxpayers' voluntary compliance. For instance, in cases where companies are unable to submit their Companies Income Tax (CIT) returns by the due date due to unavailability of signed Audited Financial Statements, the platform provides an option for companies to make payment on account and this helps in avoiding additional penalties and interest charges for late payment.
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