The Application of Digital Technology in Optimizing the Business Environment in Tax Administration

This paper examines the potential benefits of digital technology in tax administration in African countries.It proposes three hypotheses:(i) digital technology can reduce the compliance burden on businesses and taxpayers,(ii) it can improve the efficiency and effectiveness of tax administrations,and(iii) it can enhance the transparency and accountability of tax administrations.The study mentions econometric models to test these hypotheses for further quantitative evidence.The Federal Inland Revenue Service(FIRS) in Nigeria serves as a case study,showcasing the positive impact of digitalization efforts on tax revenue collections.These efforts have reduced the compliance burden,improved data accuracy and timeliness,and enhanced communication between taxpayers and the tax authority,even during the COVID-19 pandemic that has elicited the importance of digitalization in tax administration,thanks to the various technology-driven initiatives such as Integrated Tax Administration System(ITAS),Standard Integrated Government Tax Administration System(SIGTAS),and TaxPro-Max implemented over the years.The West African Tax Administration Forum(WATAF) supports e-tax administration initiatives to automate processes and improve service delivery.The paper urges developing economies to embrace centralizing and standardizing digital technology transformation initiatives,for it is crucial fo r building institutional capacity and effective resource utilization in tax administration.