E-Administration and Public Service Delivery in Federal Inland Revenue Service (FIRS) in Nigeria

1.1Background

 

One of the most revolutionary realizations in the organization of human societies and one that takes on the magnitude of a necessity to human survival is the discovery that institutions could be designed to cater for the interests of members of the society, this realization culminated in the formation of governments and the entrusting of such governments with delivery of public services covering different aspects of living. According to Chukwuemeka et al. (2017), the primary purpose of governments as it relates to public service delivery revolves around improving the quality of life of citizens. This is achieved through a web of social obligations and legitimate expectations (Akinleke, 2015). Historically, the administrative processes relating to public service delivery have been constrained in time, space, reach and efficiency because of the use of manual processes. This has over time led to bottlenecks, poor service and little coverage of the constituencies which a public service agency is supposed to serve.

 

Essentially, e- administration relates to the use of the internet in the planning, execution and monitoring of administrative processes. Ananti & Umeifekwem (2012) expressed that the use of e- government in public service involves the use of innovations in information and communication technology to improve the generation of favourable outcomes in terms of the conduct of the administrative processes related to meeting the aims and the objectives of the organization in question. The World Bank (2012) conceptualized e- administration in public service delivery as the use by government agencies information technologies that have the ability to transform relations with citizens, businesses, and other arms of government. Choudrie et al. (2012) and Akinleke (2015) mentioned that e- administration entails the use of Web 2.0 technologies, both internally (intranet) and externally (internet), to increase collaboration and transparency and efficiency. E-administration also entails comprehensive connected systems aimed at more effective performance of organizational goals and objectives. In developed countries like USA, UK, France, Japan, Canada and Denmark, the delivery of public services is handled by electronic systems which improves the efficiency of delivery of such services and ensure that citizens are satisfied.

Before the widespread adoption of e- administration in all the developed countries of the world and in some developing countries, administrative processes were cumbersome and characterised by low productivity, poor

 

utilisation of available resources, inadequate organisational records systems which have implications on accountability and systemic neglect of duties which deleteriously impacts on public service delivery (Ayo and Ekong, 2008; Adeyemo, 2011). Atkinson (2000) and Chen et al. (2006) revealed that the performance of public service organisations in the developing countries prior to the introduction of e-administration systems is characterised by slow pace of functioning, the manual flow and exchange of documents, the loss of documents and the inefficiency of processes through which data and information required for decision- making processes can be retrieved.

In Nigeria like every other developing countries, the introduction of e- administration played a significant role in causing a shift between the expectations of service on the part of the public and the actual service delivery levels of organisations (Mark, 2015). Prior to the introduction of such systems, public service delivery revolved around manual processing of paper documents which are then transferred from one office to another by clerks and other low level staffs. This situation essentially creates a dynamic in which only a limited number of individuals can access data or information per time, thus leading to an inefficient and ineffective decision- making process. This has also led to the widespread perception that the Nigerian public service delivery system is incompetent and delivers at low levels of customer satisfaction (Onwunyi & Okoli, 2017).

 

According to Abasilim & Edet (2015), the importance of e- administration in public service delivery stems from the fact that it is a way for governments to use the most innovative information and communication technologies, particularly web- based internet applications, to provide citizens and businesses with more convenient access to government information and services, to improve the quality of the services and to provide greater opportunities to participate in democratic institutions and processes. Abasilim & Edet (2015)’s stance is premised on the assumption that the government remains the most important provider of certain services, the performance of which the private sector will find uneconomical or inefficient to carry out because of various legal and situational constraints. By implication, e- administration improves the ability of individuals and group to obtain government services through non- traditional electronic means, enabling access to government information and to completion of government transaction anywhere, in any time basis and in conformance with equal access requirement.

Ananti and Umeifekwem (2012) and Choudrie et al. (2012) pointed that the usefulness of e- administration have been realized by governments all over the world and essentially one of the major differences between the governments of developed and developing countries are the level of effectiveness and efficiency in service delivery. Brussell (2011) noted that the adoption of e- administration presents government all over the world with a tremendous impetus to move

 

forward in the 21st century with higher quality, cost- effective government services and a better relationship between citizens and government. The author further asserted that the utilization of e- administration in public service delivery has vastly improved transactions between government and business, government and citizen, government and employee, and among different units and levels of government.

All over the world, the importance attached to the process of ensuring that public service delivery is improved has necessitated the incorporation of advances in information and communication technology into the process of public service delivery. Azemi et al. (2016) asserted that this trend is a reflection of a more global move towards the application of technological transformation to the promotion of efficiency, a more profitable government and the facilitation of more suitable government services in the public sector. The adoption of e- administration in many countries have come attached with tremendous benefits. One of such benefits is the fact that citizens get better informed and this drives increased participation in the process of governance. Akinleke (2015) asserted that the adoption of e- administration has over time enhanced the quality of governance at both the state and the federal levels because such adoption get citizens well -informed and participate in governance as it provides greater access to government’s information and activities.

 

In a country like Nigeria, the importance of information and communication technology to the process of ensuring the efficiency and effectiveness of public service delivery cannot be over- emphasized. Essentially, e- administration offers the potentials of reshaping the public sector and improving the relationship between the citizens who are the beneficiaries of public services and the government which is responsible for the provision of such services in the first place. Over the years, concerns have been raised over the effectiveness of public service agencies in the country. Such concerns often revolve around the lackadaisical attitude of employees, non- achievement of stipulated service delivery levels, ineffective interface between citizens and the government and poor definition of organizational goals and objectives. According to El- Rufai (2013), the realization that public service delivery levels in Nigeria are low can be attributed to among other things the failure of public organizations to key into e-government with the attendant gains that is attached to such processes.

The delivery of public services in Nigeria is often encumbered with complex administrative processes and red- tape which over time have hampered the speedy development of the public and private sectors in the country and has resulted in the country having consistently low ratings in terms of metrics such as ease-of- doing-business, accessibility to services, innovation in service delivery and the availability of such services in the first place. As noted by Akinleke (2015), the emergence and evolution of the private sector in Nigeria

 

has over time not veered towards the delivery of essential services like electricity, mass education, water services and comprehensive health services for the masses. A larger majority of citizens have to rely on the government for these services and as such there is a premium on effective public service delivery. As such, excellent public service delivery is an important requirement in ensuring that a larger percentage of the population have access to quality services that would enrich their lives. This research is geared towards an examination of the potentials of e- administration in improving public service delivery in Nigeria.

According to the quarterly publication of FIRS (2018), e-administration obtainable at Federal Inland Revenue Service of Nigeria borders on e- registration, e-filing, e-tax payment, e-receipt, e-TCC and e-stamp duty. E- registration is the creation or employment of online registration form, electronic registration form or inherent processes in online registrations to deliver time saving, cost saving and qualitative public services to the citizens of a country. Traditionally, the Federal Inland Revenue Service of Nigeria undertakes all forms of registration manually. The volume of revenue generateable is done with manual processes. Some of the activities manually registered are company income taxes, capital gain taxes, value added tax, education tax, personal income tax, stamp duties, withholding taxes, customs and exercise duties, land use charge and so many others not mentioned. The FIRS is constitutionally

 

saddled with the responsibilities of collecting all forms of revenue due to the government of Nigeria. Before these revenues are collected some forms of documentations must be carried out for record purposes. The records reveal who and who paid, how much was paid, what payment was made, when a payment was made. The responsibilities on the shoulder of FIRS were grossly characterized by weak, inefficient, non transparent, costly and time wasting public service delivery. As time progresses the ministry was looking for a way out to address the challenges hampering the success of effective service delivery. And today the agency has joined the rest of the world economy by introducing e-registration as one of the tools towards achieving effective service delivery. All the registrations manually done al binitio have been transformed electronically. With this, one can sit in the comfort of his or her home to register any services that can be rendered by FIRS Nigeria.

In the same vein, the FIRS introduced e-filing alongside other e-administration components. According to Business Dictionary (2020), “e-filing is the process of using a computer program to transmit information electronically to a user, allowing the user to complete and submit the information in a timely fashion.” The e-filing system minimizes the tendencies of users to make minor mistakes by alerting them of any error during filing of tax return. The e-filing weapon was introduced by FIRS to reduce to the barest minimum or completely eliminate the manual and outdated filing system the agency and tax payers were

 

used to. Any person, firm, ministry, department and agency that have dealings with FIRS can easily and conveniently receive and send tax returns to the FIRS provided outlets. This e-filing system makes the tasks of FIRS easier and interesting, allowing for a less costly, less time wasting, less stressful and satisfactory public service delivery. A very good side of the e-filing system of the FIRS is that it helps detect a possible incorrect input when keying in data with respect to tax issues. On a more comprehensive note, the e-filing system is really an upgrade of the manual system of filing tax information. In the FIRS e- filing procedure manual, some directions and guidelines have been given by FIRS (2019) with respect to how a ‘user ID can be got to access the FIRS e- filing platform. It takes the following procedures;

 

 

 

 

 

 

 

You are required to change your password upon first log-in

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: FIRS 2019

 

The following are the procedures for rendering tax returns on the FIRS e-filing platform. It is as given below;

 

 

 

 

 

 

 

 

 

 

 

 

 

Source: FIRS 2019

The two procedural frameworks given above are steps through which taxpayers can follow to get user ID so as to be able to access the FIRS e-filing platform and steps to be followed for rendering tax returns on the e-filing platform of the FIRS. The e-filing is one of the e-administrative platforms put in place by the FIRS to be able to render easy and quality public service delivery to the members of the public.

Among the e-administration components introduced by the FIRS is e-tax payment. The e-tax payment is a facility adopted by the FIRS in the year 2015 to facilitate the ease of payment of income tax by tax payers through internet by the use of net-banking facility. Wasao (2014) sees e-tax payment as an online channel or system where tax payers can have access to a platform through the use of internet, allowing them have access to the services provided by tax authorities. Some of the services provided by tax authorities include registration of tax identification number, e-filing of tax returns and few others. The Federal Inland Revenue Service of Nigeria conducts e-tax payment services through Business Process Improvement (BPI) (Olaoye & Atilola, 2018). The Business Process Interface widens the scope of electronic interface with different taxpayers simultaneously allowing for Federal Inland Revenue Service improvement in the quality of services rendered by staffs to the members of the public as well as improved efficiency and effectiveness among staffs.

Crede (2008) noted that government all over the world have tremendously invested in electronic online gadgets for more than two decades now. According to the writings of Harold (2011), it was noted that an efficient national revenue collection system is a panacea and hub for all public administration system as well as an integral strength through which sound fiscal management is based. The Federal Inland Revenue Service as a public sector organization functions immensely on electronic system strategy so as to be responsive to its

constitutional obligations of collecting revenue for the government of the federal republic of Nigeria. On this note, the FIRS in partnership with Nigeria Inter Bank Settlement System (NIBSS) introduced the e-tax payment system in 2015. In the words of Okunowo (2015), “electronic tax payment was introduced so as to increase revenue generation and for easy accessibility as tax payers are able to pay taxes from different locations and at various time.” There is information and communication technology (ICT) department at the Federal Inland Revenue Service charged with the responsibility of providing support and customer care services to members of the public who want to make tax payment. Another motive for the FIRS information and communication technology is to jointly work with other departments within the agency to ensure that revenue generation is increased as well as to aid voluntary acceptance of e-tax payment by all and sundry in the country.

Abdulrazaq, Issa & Abdulrazzak (2015) pointed out some elements associated with e-tax payment system in Nigeria as subsequently given; online payment can be made to Federal Inland Revenue Service by tax payers on Value Added Tax (VAT), Petroleum Profit Tax (PPT), Capital Gain Tax (CGT) and Companies Income Tax (CIT). Tax payers can make direct payment from their bank accounts which are possible through the partnership in existence between the Federal Inland Revenue Service (FIRS) and Nigeria Inter Bank Settlement System. Another element of e-tax payment of the FIRS is tax clearance

certificate which can be applied for and processed online without necessarily paying visit to any of the Federal Inland Revenue Service offices across the 36 states of the federation. In the same vein, e-tax payment of the Federal Inland Revenue Service of Nigeria has aided easy checking and verification of tax identification number, hence the process of making deductions on withholding tax has been made easy by the introduction of the e-tax payment system (Olaoye & Atilola, 2018). With the help of the e-tax payment system electronic exchanging of information between those who make tax payment and Federal Inland Revenue Service officials are improved and made possible. The online tax payment system of the FIRS was designed in such a way that fines and fees for lateness of the submission of tax returns are automatically calculated and imposed on defaulters (Olaoye & Atilola, 2018).

The Federal Inland Revenue Service also introduced e-receipt as one of the strategies of its e-administration policies. The electronic receipt is an online evidence of any product or service that was bought. It is usually sent to tax payers through e-mail address or mobile app. The e-receipt of the Federal Inland Revenue Service helps the agency reduce to its barest minimum paper usage. It is also used to inform tax payers of rebates and discounts. In fact, it is one of the marketing instruments and business intelligence of the Federal Inland Revenue Service. With the help of electronic receipt, FIRS can track those businesses that are supposed to make payment to the government. This is done through the

business intelligence nature of electronic receipt. The transactions between taxpayers and Federal Inland Revenue Service officials are documented electronically which makes it easier to track businesses due to make payment to the government. The Federal Inland Revenue Service distributes electronic receipt through email address of clients or tax payers, apps, websites or web app. The idea behind electronic receipt is that there are many ways through which it can get to the tax payers who will ultimately consume it.

Electronic tax clearance certificate (E-TCC) is a weapon of the Federal Inland Revenue Service to ensure that tax payers make payment of their taxes as at when due. It is a new system the management of Federal Inland Revenue Service introduced for issuing tax clearance certificates in Nigeria. It was introduced to replace the paper and manually processed tax clearance certificates issued to tax payers. The paper and manual issuance of tax clearance certificate has a lot of setbacks to the delivery of quality public services. Some of the setbacks include a huge number of fake tax clearance certificates in circulation, huge loss of revenue by the government of Nigeria through large scale fraud and malpractices, evasion of taxes by individuals and organizations, unnecessary delay in the issuance of tax clearance certificates to tax payers and poor identification of tax payers by Federal Inland Revenue Service officials. To this extent, the management of the Federal Inland Revenue Service decided to include e-TCC as one of the strategic weapons of revenue generation as well

as a catalyst of improvement on the old paper and manual tax clearance certificates administration.

Ideally, the main objective of the electronic tax clearance certificate of the Federal Inland Revenue Service is to tremendously give upward trends to the internally generated revenue of the nation through Pay As You Earn (PAYE), direct evaluation and assessment of the tax payers on individual basis and getting hold of more tax payers into the tax net of the federation (Asada & Zumka, 2016). As noted by Asada & Zumka (2016), electronic tax clearance certificate has been of immense help to both the government of Nigeria and individual tax payers. The table given below is the summation of the help electronic tax clearance certificate has been to the government of Nigeria and individual tax payers;

Help to the Government of Nigeria Help to Individual Tax Payers

It has aided identification of tax payers It has helped to serve as an identity card to the tax payer holding it

It has aided the elimination of the circulation of fake tax clearance certificates within the economy It has aided data integrity of individual tax payers

It has aided tax payer enumeration It has aided the assurance to tax payers

 

that all payments would be remitted to

 

the purse of the government by various agencies of the government

It has aided the attraction of more tax payers into the tax net of federal government The electronic tax clearance certificates issued by the Federal Inland Revenue Service is durable and portable

It has tremendously helped in easy reconciliation of Tax Returns It has availed easy access to tax payer’s payment history

It has aided total remittance of all collected revenues into the purse of the government It has helped in the elimination of unnecessary delay in obtaining tax clearance certificates.

Source: FIRS (2019).

The adoption of electronic tax clearance system has served as a catalyst of sophisticated development in the delivery of public service. It has made the Federal Inland Revenue Service to develop an online application form, information and communication technology facilities such as computers, printers, internet access and generators installed at the offices of the FIRS across the 36 states of the federation. Customized terminals or card reader distributed to designated places and tax offices nationwide. Proper maintenance of database ensuring data integrity, staging of serious enlightenment campaign for

awareness creation, and gathering of accurate and timely data on tax payers’ tax payment (FIRS, 2019).E-stamp duty is another weapon of revenue generation the Federal Inland Revenue Service of Nigeria has resorted to in a bid to ensure that the general public enjoy efficient service delivery. On the 29th of April, 2019, the Federal Inland Revenue Service published a circular with the title “Clarification on the Provisions of the Stamp Duties Act (the Information Circular)” (Proshare, 2020). The effort of this is to provide a guide for implementation to tax payers on different provisions of the Stamp Duties Act (SDA) as amended by the Finance Act, 2019. The Finance Act made adjustment to the Stamp Duty Act through the expansion of the scope of instruments liable to stamp duties to include ‘electronic documents’. As a result of this amendment, electronic documents are henceforth liable to stamp duties where stamp duties is expected to be paid within the interval of 30 to 40 days after they have been executed or within 30 days after they have been received in Nigeria (if executed outside Nigeria) (Proshare, 2020).

Though the scope of instruments of stamp duty was expanded by the Finance Act to include electronic documents but the Finance Act failed to define and clarify the meaning of the phrase “electronic document” having been received in Nigeria as it relate to abroad executed documents. Bearing in mind the discovered gap in the Finance Act, the Information Circular was able to make

some clarification on what will constitute an 'electronic document' and gives condition under which an electronic document, receipt or instrument executed outside Nigeria will be deemed to be received in Nigeria for stamping purposes (Proshare, 2020).

The information circular initiated by the Federal Inland Revenue Service of Nigeria was in a bid to correct the lapses of the Finance Act, to this extent, the information circular entails “all written or printed dutiable instruments or receipt; all electronic dutiable instruments or receipts in the form of electronic media content, electronic documents or files, emails, Short Message Services ("SMS"), Instant Messages ("IM"), any internet-based messaging service, website or cloud-based platform; all printed receipts (including Point-Of-Sale receipts, fiscalized device receipts, Automated Teller Machine (ATM) print- outs and other written or printed acknowledgments); and all electronically generated receipts and any form of electronic acknowledgement of money for dutiable transactions” (FIRS, 2020).

Further illustration is provided on all electronic dutiable instruments such as electronic media content, electronic files, emails, SMS and other internet based messaging services by the information circular of the FIRS. The information circular went deeper to state that, “an informal lease agreement whose terms and conditions are expressed via email correspondence; and a lease agreement drafted and executed online with no physical document to evidence it, are both

 

electronic dutiable instruments.” Making inferences from these statements one can easily say that chargeable instruments like contract agreements, loan agreements and all assets debentures executed through online platforms constitutes electronic dutiable instruments. Also the information circular illustrates that even WhatsApp message acknowledging receipt make up a receipt that is liable for stamp duty to be paid on. According to FIRS (2020), the details of the transaction on which such receipt was issued must be disclosed to the FIRS for assessment and evaluation so as to determine the appropriate stamp duties payable on such transactions.

The information circular reiterates the Finance Act provisions by stating that in inclusion to the conventional stamp duties like the fixation of adhesive stamps on the item as well as a die on the item other modes are electronic stamping and impressions, electronic tagging, issuance of stamp duties certificate and any form of acknowledgment of payment for stamp duties (FIRS, 2020). As a result of this, the Federal Inland Revenue Service directed the attention of people in the society to the automated stamp duties collection portal (www.stampduty.gov.ng). This portal is where the citizens that are due to pay,

government agencies, institutions, and banks can log in to pay stamp duties in the same vein, receive electronic acknowledgement that stamp duties have been settled.

Having extensively and critically given the analysis of e-registration, e-filing, e- tax payment, e-receipt, e-TCC and e-stamp duty of the Federal Inland Revenue Service as the components upon which the e-administration principle of the agency is hinged upon, the problems this study seek to address are stated below.