Meaning of Information Communication
Technology,
Information
communication technologies is an umbrella term that includes any communication
devices or application, encompassing; radio, television cellular phone,
computer and network hardware and software, satellite systems and so on, as
well as the various services and applications associated with them, such as
video conferencing and distance learning.[1]
The phrase was coined by Television in
his 1997 report to the UK government and promoted by the new national
curriculum document for the UK in 2000[2] Information communication technology is a
diverse set of technological tools and resource used to communicate, and to
create, disseminate, store, and manage information.3
These technology include computers, the internet, broadcast technologies and
telephones.
In
the past the few decades, information and communication technologies have
provided society with a vast array of new communication capabilities. For
example, people can communicate in “real time” with others in different
countries using technologies such as instant messaging, voice over IP and video
conferencing. Modern information communication technologies have created a
“global village,” in which people can communicate with others across the world
as if they were living next door. For this reason, ICT is often studied in the
context of how modern communication technologies affects the society.
In
conclusion information and communication technology (ICT) has become, within a
very short time, one of the basic holding blocks of modern society. Many
countries now regard understanding ICT and mastering the basic skills and
concepts of ICT as part of the study of education, alongside reading and
writing.
Relevance of Information
Communication Technology to Taxation.
Modern tax administration is
fundamentally dependent on technology, with much of the work done
electronically. The scale and complexity of the operations are significant and
therefore cannot be overemphasize. Throughout the years, the tax administrators
have been constantly concerned about developing new ways of improving
institutional performance by increasing the effectiveness of tax control and
providing taxpayers service that may allow them to better comply with tax
obligations.4 Information
communication technology brings to taxation new technologies that provide new
opportunities, bring additional speed to obtain and use information and help
reduce errors associated with the generation and supply of information relating
to tax. The information obtained from the tax payer this way is an effective
support to the taking of decisions; its breath and easier availability are
useful to the tax administrator to achieve better adaptation of the processes
of the environment. More so, information communication technology reduces
processing times and production cycles, permit rapid adjustments in the
procedures, grant greater flexibility, which translate into increase in
effectiveness. Information communication technology helps tax administrators to
offers services, which were not feasible before. For instance, the tax
administrative office can be located in any place in the country and the
taxpayer can be in any part of the world in which there is a personal computer
(P.C) connected where internet exists. This means that a person need not be
physically present in the tax administration office to pay his or her tax and
that taxpayer can file return or make their payments from their homes 24 hours
minimal compared with the traditional operating schemes.
In
the same vein, technology allows the tax administrators to increasingly know
more details each taxpayer and administrate this information to be able to
offer personalized services and specific specialized controls. The quality of
the information of the transaction carried out by the taxpayers with the tax administration
improves significantly. Not only can the tax administrators capture the data
from the source that generate them, but also he can offer the programs that
allows them to generate the data, prepare their returns, settle their taxes and
in general allows them to comply with their tax obligations.5 The tax administrators can also
increase the means to receive mass information from taxpayers and information
agents, reducing significantly the time for processing and availability of that
information. In addition to the obvious advantages related with the contact
with taxpayers internally the benefits are very important. For instance, there
can be effective interaction between the various branches and employees across
the country. The aspect of releasing information to employees at all levels is
simplified by publicizing the information in their internal portal or use of
e-mail. The use of information technology brings new mechanisms that create a
good working relationship on a group basis, unlike the traditional taxing
system that transfer people in order to carry out any work on a team basis or
execute different activities of the same process. With the use of information
communication technology, you have to connect them.
The
central Bank of Nigeria (C.B.N) said that specific benefit to be derive from
the use of information communication technology in taxation include: reduction
in the time and cost involved in making tax payments easier and more user
friendly platform/solution for the payments of tax; to ensure that the right
amount are paid into coffers of the relevant agency by providing information
for assessment; to facilitate establishment of a comprehensive national
taxpayer database to complement efforts to eliminate or reduce the incidences
of tax payment, to assist relevant revenue authorities in tax management
information for decision making and reconciliation, and to ensure improved
revenue generation to the relevant tax offices and ensure that the tax
loopholes are plugges6
Information Technology and Taxation in Nigeria
The dynamic nature of
information and communication technology in today’s global village gives it
prominence in any society, and Nigerian government has recognized the dire need
for this innovation. Information communication technology in tax administration
in Nigeria
is a major issue. Technology, the automation of tax systems, procedures and
processes and the use of electronic platforms are the future of tax
administration in Nigeria.
In Nigeria today, the Federal Board of Inland Revenue Service have several technology
based initiative and this have been implemented in last 7 to 8 years, which
have yielded significant divided in improved tax collection, increased taxpayer
confidence in the tax system, increased efficiency in tax operation and
reduction in leakages etc.7 presently,
the J.T.B. has instituted the online electronic payment of tax which helps to
track all payments to avoid multiple taxation8.
Note long ago, the central bank of Nigeria (CBN) released draft guidelines for
electronic payments of all forms of taxes at all level of government9 . The apex bank in the
guidelines defined standard requirements for the enthronement of implementation
of e-payments by any government agency authorized to collect taxes, levies or
other such government dues. These guidelines are in order to help taxpayers met
their tax obligation with ease. Some banks in Nigeria for example have in order
to help it’s customers meet their tax obligations with ease, for instance, the
First Bank of Nigeria Plc (First Bank) has commenced issuance of Federal inland
Revenue Service’s e-tax card. The card being introduced by the tax authority is
a self-service payment channel through which customers can pay their taxes
without physically visiting a bank branch10.
The Challenges of
Information Communication Technology toward an improved Taxing System
Tax system in developed countries;
both new challenges and new possibilities as a result of technological change11. In developing countries, taxpayers
and tax administrations must cope with more difficult environments with fewer resources.
For instance how new technology may or should influence the way a country’s tax
system or particular taxes are designed and administrated.
The effective management of
tax repayment is the key for good tax administration, but revenue bodies face
the ongoing challenge of balancing taxpayer’s expectation for high levels of
service with their responsibility for preventing and dealing with fraud and
errors. This is underscore by the fact that the potential speed, untraceable
and anonymity of electronic transaction can also create new possibilities for
tax avoidance and evasion. These needs to be addressed in order and prevent market
distortions. Again, technological advances may put particular pressure on the
principle governing the taxation of transnational transactions. It is the very
nature of these developments that tends to blur national borders and source and
character of income. Significant issues often arise regarding how the income
arising from transnational transactions utilizing these technologies
should be treated under current rules. As a result,
it is possible that countries with the attendant possibility that taxpayer will
the subject to international double taxation.
Again
another challenge facing tax administrators in relationship to information
technology is to adapt existing legislature, procedures and practices to
overcome any deficiencies, which emerge as a result of new means of communication
and technology. For example, a taxpayer on the internet may be identifiable
only by its domain name (e.g. www.taxpayername.com). Yet, the correspondence between
the name and residential area for purpose of taxation is Tenuous. “On the
interest, nobody knows you are a dog”12
without accurate identification of taxpayers, it is difficult to levy taxes.
Even if you can identify the taxpayer, but not it’s physical location in the
world, this will give rise to jurisdictional disputes. To the issue of identification
in the challenges facing information communication technology toward improve
taxation system is the inability of tax authorities to collect information. In
the conventional commercial environment, taxpayers keeps books and records and
provide information to tax authority to support the assessment of tax. Where
the authorities have the need to verify information provided by the taxpayer,
the can rely upon third party information from financial institution or other
intermediaries. In the electronic environment, electronic book and records may
be more easily stored in a foreign jurisdiction. Encryption used quite
legitimately to protect commercial secrets, may also be used to deny tax
authorities access to records.
Moreso,
a major challenge facing the use of information communication technology
towards an improve taxing system, is the fact that in most developing countries
there is no stable power supply, and of the technology instrument needs power
to maximize it’s result. For instance a country like Nigeria where there is constant
power failure., this can lead to system breakdown, which
Will in turn affect the
effectiveness of the input of information communication technology to taxation.
Country, where large amount of the population are uneducated on how to use
I.C.T., it becomes a problem, as the person who does not know how to operate it
cannot use it to pay his or her tax as the case maybe, and this is also
peculiar with the tax administrators itself, as most of the staff are
uneducated and cannot use I.C.T.
[1] www.techterm.com
assessed on the 20 day of June 2011.
[2]
Encyclopedia 2. The Freedictionary.com assededon the 20 day of june 201.
3 Blurton,
C., “new directions of ICT – use in education” http://www.unesco.org/education/educprog/iwf/dl/dl/edict.pdf:
assessed 7th August 2011.
4 Nelson
Gutierrez “Third regional training workshop on taxation; information technology
in support of the tax Administration functions and taxpayer assistance” www.unpan1.un.org
assessed on 17th August.
5 Ibid
6
Rasaq Adekunle Quar,
(June 2009) wikipedia, the free encyclopedia, URL: http://en.wikipedia.org/wikiRasaq-Adekunle-Quardri
visited on the 16 of July 2011.
7
Ifueko Omoiui Okauru, “Emerging Issues in Tax Administration: the way forward
for Nigeria” (unpublished
lecture note, University
of Lagos) 12th
July, 2011
8
Emeka Anuforo, “FG. Sates move to stop multiple taxation, others” (27th
April, 2010) The Guardian at p. 4.
9
Iheanyi Nwachukwu professionals appland (CBN/s e-payment tax system: Business
Day, Monday 15 March 2010.
10 All Africa. Com: Nigeria: First Bank Issues First’s
E- Tax card’ http://allafrica.com/stories/20100481015.html(visited 2011, July,
17).
11 Ibid
12 12New York Times” where two dogs are seen sitting in front of a
computer”(July 5th 1993) pg. 10