Federal Inland Revenue Service is partnering with the Nigerian Communications Commission to create an Application Programming Interface to obtain more transparency on the value added tax paid by telcos in the country.
Towards this end, the two government agencies signed a Memorandum of Understanding, which allows the NCC to integrate an API solution with the enterprise systems of telecommunications companies in Nigeria.
An API enables interaction between data, applications, and devices. It delivers data and facilitates connectivity between devices and programmes. Between the FIRS and the telcos, NCC’s API will deliver information relevant to the amount of VAT that telcos ought to pay as they operate.
The API will eliminate the cases of paying multiple taxes for the telcos, and it will help the FIRS to ensure that the amount paid as tax is both accurate and complete. It will cover all the tax elements payable by the network operators as they make their daily transactions.
Before this time, the amount to be paid as tax had always been determined from the telcos books of accounts.
What the FIRS will achieve with the API implementation is the ability to independently verify the telcos in the area of tax without relying on what the books say.
During the signing, NCC boss, Prof. Umar Danbatta, said the move was also intended to curb instances of multiple taxation suffered by telcos operating in the country.
Danbata said, “Our concern, as the regulator of the telecoms industry, is that we needed to be sure that it is not another way to tax telecoms operators, who are already dealing with multiple taxation issues.
“We have also ensured that the integration of the solutions with telcos’ transaction systems will not, in any way, impact the cost and quality of service delivery by the Operators to telecoms consumers.”
For the sake of transparency both from the telcos and FIRS, the API is an innovative step in the right direction. It points to the fact that the Federal Government is exploring ways to employ technology in making its processes better.
The CEO of the FIRS, Muhammad Nami, said the API was developed in-house with the sole goal of monitoring transactions.
Replacing old ways of handling monetary transactions with innovative and transparent tech solutions will cut off some of the channels by which funds are embezzled in the country, especially at agency level.