IMPACT OF ELECTRONIC TAX ADMINISTRATION SYSTEMS ON TAX REVENUE IN NIGERIA (2015 - 2022)

Abstract

This study investigated the relationship between electronic tax (e-tax) administration system and tax revenue generation in Nigeria. The primary objective was to examine how various e-tax administration components influence tax revenue. The study adopted both correlational and ex-post facto research designs. The correlational approach was employed to determine the relationship between e-tax administration system and tax revenue, while the ex-post facto design explored potential cause-and-effect relationships using existing data. The study utilized macro-level secondary data obtained from the Federal Inland Revenue Service (FIRS) tax statistics covering the 36 states of the federation. Econometric techniques such as stationarity tests, co-integration, and Granger causality tests were used to analyze the data. The findings revealed a significant positive relationship between e-tax administration system and tax revenue in Nigeria. Specifically, electronic tax registration, electronic filing of tax returns, and electronic tax payment were found to have a significant positive effect on company income tax revenue. The study concluded that an effectively managed e-tax system can substantially enhance tax compliance and revenue generation in Nigeria. It therefore recommended that the FIRS should sustain and expand electronic filing and payment processes, and ensure that all tax clearance certificates are issued electronically to promote compliance, reduce administrative costs, and improve company income tax revenue.