Rethinking Automation of Tax Administration in Nigeria: Successes and Limitations

Abstract

The paper explored the automation of tax administration in Nigeria, highlighting its successes and
limitations. Historically, tax collection in Nigeria evolved from rudimentary methods to a more structured
system introduced during the colonial era. In recent years, the Federal Inland Revenue Service (FIRS)
implemented significant reforms to modernize and automate tax administration. Key initiatives included
the introduction of the Unique Tax Identification Number (U-TIN), Integrated Tax Administration System
(ITAS), and various automated payment systems. These reforms aimed to enhance efficiency, reduce tax
evasion, and minimize physical interactions between taxpayers and tax officials, particularly crucial during
the COVID-19 pandemic. Despite these advancements, the paper identified several challenges hindering
full automation, such as inadequate funding, unreliable ICT infrastructure, inconsistent power supply, low
digital literacy among taxpayers, and distrust in the system. The paper recommended enhancing funding
for FIRS, improving ICT infrastructure, ensuring reliable power supply, promoting digital literacy, and
strengthening data management systems. By addressing these challenges, Nigeria could achieve a more
efficient and transparent tax administration system, ultimately boosting revenue generation and economic
stability. The study provided valuable insights for policymakers and stakeholders aiming to optimize tax
administration in the digital age.