TaxPro Max: The game changer in tax administration in Nigeria
In June 2021, the Federal Inland Revenue Service (FIRS) introduced its Naira denominated tax filing platform, the TaxPro Max, an online platform meant to ease tax compliance and modernise tax administration in the country. This is in compliance with the provisions of the Finance Act 2020 which empowers the FIRS to automate tax return filing and payment processes.
The TaxPro-Max platform which became effective from June 7th, 2021 is amongst other things, to enable seamless registration, filing and payment of taxes including automatic credit of withholding taxes and other credits to taxpayers’ accounts.
Announcing the introduction of the new platform, the Executive Chairman, FIRS, Mr Muhammad Nami, said, “The TaxPro-Max provides a single-view to Taxpayers for all transactions with the Service.”
Indeed, with the dwindling revenue of the federal government owing essentially to the fluctuations in the global crude oil prices, the next option to increase the nation’s revenue base is effective and efficient tax administration, and technology holds the key to achieving this.
Enters TaxPro Max
As expected, the very first year of its deployment, TaxPro Max turned out to be a game-changer helping the FIRS to achieve over 100 percent of its 2021 collection target.
In 2021, FIRS collected N6.405 trillion (N2.008trilion from oil and gas revenue), and (N4.396 trillion from non-oil and gas), against a target of N6.401 trillion.
This is a massive improvement over the N4.95 trillion the Service generated in 2020 before the introduction of the automated filling system.
So far, in the first quarter of 2022, the FIRS, has generated a sum of N532. 48 billion from Company Income Tax (CIT), an increase of 35.6 percent compared to Q1 2021 and N588.59 billion as value-added tax (VAT), representing an 18.6 percent increase compared to N496.39 billion generated in the corresponding quarter of 2021.
This achievement is traceable to the introduction of TaxPro Max which has made tax filing easy and with more efficiency.
How TaxPro Max works
The FIRS in explaining how the system works said, “The TaxPro Max Portal can be accessed by taxpayers from anywhere and in the comfort of their home/office. It has been deployed in all FIRS offices nationwide, with the following functionalities (Registration, Filing, Assessment, Payment, Issuance of Tax Clearance Certificate and receipts for resident and non-resident taxpayers):-
E-Registration: Taxpayers (resident and non-resident companies) can be registered on TaxPro Max (https://taxpromax.firs.gov.ng), on a user-friendly interface. Here, a ‘resident company’ is a Nigerian business registered or incorporated under the Companies and Allied Matters Act, while a ‘non-registered company’ (NRC) is a business/individual not registered or incorporated in Nigeria but derives income or profits from Nigeria in any kind of business it operates.”
The TaxPro Max system, according to FIRS, “connects to the Corporate Affairs Commission (CAC) to retrieve accurate details of your business incorporation and issues/enables/validates your unique business Tax Identification Number (TIN). Once allocated, the TIN cannot be changed. After this, you can update as you deem fit, personal and business information for tax administration purposes and applied across all taxes.”
E-Filing: Taxpayers are required to file returns on a periodic basis on TaxPro Max (Manual filing/intervention is now prohibited). The TaxPro Max system accommodates different tax periods such as bi-monthly, bi-annual. The Service said all submissions made on TaxPro Max are seen as self-assessment. “Your business or tax consultant/agent can now file return on TaxPro Max, for CIT, VAT, WHT, WVAT, PAYE, PIT, EDT, NITDEF, STAMP DUTY, EMTL, NASENI as well as Police Trust Fund. Businesses in Insurance, Aviation & Shipping Sectors can also file their CIT returns on the system. On TaxPro Max you can utilize credit notes while filing CIT for your business. Also, your business will receive notices on due dates for filing, payments and penalties.”
E-Payment: The taxpayer can pay through multiple payment channels – online, direct debit, debit cards, payment gateways (Remita, InterSwitch, eTransact) etc, integrated with TaxPro Max. You can make tax payments in installments. Taxpayers can view/calculate payment amounts and schedules prior to committing to an installment payment agreement. Taxpayers can view interests charged to their business on a daily or monthly basis until payment is executed.
E-Receipts: You will get FIRS-branded receipts for payments made, sent automatically to the email address your business used in registering with FIRS. The authenticity of an e-Receipt can also be verified by scanning the QR bar on the top right corner of the e-Receipt with your QR reader. e-Receipt can be verified by visiting https://tcc.firs.gov.ng.
E-TCC (electronic Tax Clearance Certificate): After fulfilling the tax obligation of your business, you can request for the e-TCC from the comfort of your home or office. Application for the Tax Clearance Certificate can only be made electronically and online by visiting https://tcc.firs.gov.ng/. Upon approval, a link to download the e-TCC will be instantly sent to the e-mail where the TCC can be printed. The authenticity of an e-TCC can also be verified by visiting https://tcc.firs.gov.ng/, clicking on the verify e-TCC button and entering the TCC Number and TIN of the Company. You can also use the QR Reader, to scan the QR bar on the top-right-corner of the e-TCC, to verify authenticity of the e-TCC.
Tax Accounting: You can view your business’ financial transactions history/ account activities including penalties, interests, previous payments, new filings, adjustments, assessments, etc on the TaxPro Max. Your business records are accurate, safe and confidential on TaxPro Max. The TaxPro Max portal also provides an audit trail log of all transactions – such as identifying date and time of updates and who performed the tasks. It is security-enabled to prevent unauthorized access or modifications.
Dr. Titilayo Fowokan, a council member of the Chartered Institute of Taxation of Nigeria (CITN), in an interview with The Guardian said that the introduction of TaxPro-Max is a development in the right direction considering the global trend of using technology to drive tax administration which stepped up during the COVID-19 pandemic.
She said though the transition from the previous platform to TaxPro-Max has its own hitches in relation to flexibility, alignment with practical tax administration issues such as loss relief, wIthholding tax credit claims, etc., it has addressed the incidence of defaults in compliance with timely tax payment most especially with respect to the configuration of VAT penalty trigger, which is aligned to the filing and payment deadlines. It has also blocked revenue leakages and introduced transparency into the tax administration system.
“It is also a fact that a system which incorporates interactive platform would benefit both taxpayers and FIRS as a solution provider, and therefore reduces multiple trips to or physical interaction with tax offices,” she said, adding that TaxPro-Max also curbed incidence of underground dealings in tax payments by ensuring that payment is not made without issuance of Document Identification Number (DIN), making it easy to track revenue collection.
“Yes I use TaxPro-Max, it can be accessed from the comfort of our offices and rooms. Navigation on the platform is seamless when the user has appropriate understanding of how it works. However, there are some technicalities that need to be resolved to ensure seamless filing of tax returns and tax remittance processes especially with respect to frequent downtime on the platform, capturing of depreciation, capital allowance, etc.”
On ways to make the platform more functional, Dr. Fowokan said, “There are still some challenges with troubleshooting when there is a problem with the returns filed that require support from the tax office. We have to wait for the interventions of the FIRS Directorate in Abuja. Though this is acceptable as controls put in place to curb losing the integrity of the platform, we expect such interventions to be minimal as time goes on.
“There are also challenges with the technical aspect of the platform such as capital allowance restriction, recognising of input VAT in excess over output VAT, etc which have been identified for further updating of the tax technology platform.”
On his part, Prof Godwin Oyedokun, a lecturer at Lead City University, Ibadan and a tax consultant, stated that anything technology is better than manual processing. He said the objective of TaxPro Max is to link tax administration with one of the canons of taxation which is convenience, “and I can tell you that it is so far achieving that. Now you don’t need to go to any tax office to wait for hours, you can do your payments and other activities right in the comfort of your home or office. That is a commendable feat,” he said.
“However, we still have some work to do on it to get it working right. I have never used it but my colleagues have used it and I get their complaints. So we need to still rejig it so that it will work better than what we presently have.”
The 4th chairman, Abuja and District Society, Chartered Institute of Taxation of Nigeria (CITN), Dr.Ogbeide EKI Benjamin, in his own assessment of the online platform said, “I believe this Tax Pro Max software can turn around the Tax system if some of the teething problems are addressed appropriately. However, I know they are part of the problems associated with starting and working a new software.”