NIGERIA has for a very long time been operating a mono-cultural economy.

Her major source of foreign earning and revenue for many years has been oil. Oil revenue accounts for over 80 per cent of government’s incomes.
Petroleum Profit Tax (PPT) constitutes a major part government taxes. Experts predict that in the next 15 to 20 years, the oil wells may dry up and there is the need to source for other means of running the government.

Boards of internal revenue services, media and others have received  training in Canada organised by a Canadian firm, the CRC Sogema. The firm developed the template for the successful take-off of a tax project and its relevance to Nigeria.

State governments and the lawmakers have bought into the project, with the belief that once accomplished, the over- reliance on revenue from oil will reduce and that the citizens can now hold their government accountable.

Countries all over the world are run mainly through taxation and laws governing taxation are held sacrosanct and religiously too. All the developed and emerging economies like the US, Canada, UK, China among others use tax to develop.

Seeing the importance of using tax revenue to grow, Nigeria is currently developing mechanisms necessary to harness  all the institutions necessary to improve the  tax revenue system in the country.

Nigeria has not been able to document its taxpayers, thereby making it difficult to have a database of those who are supposed to pay tax. As a result of this, trillions of naira are lost to non-remittance of taxation.

For now, it is mostly salary earners that pay tax. Big companies and businesses do not pay much because there are many tax holidays they enjoy.

A major problem that limits the extent to which the tax administrators can collect taxes in Nigeria is inappropriate records of the taxpayers.

The chairman of the Federal Inland Revenue Service (FIRS), Ifueko Omoigui Okauru, has said on several occasions that nobody knows the exact number of taxpayers in the country.

In order to have and keep adequate data of taxpayers in the country, the federal and state governments have agreed to produce the unique taxpayers’ identification number  in the country.

Section 86 (9)(d) of the Personal Income Tax Act, cap P8, LFN 2007 and Section 8 (q) of the Federal Inland Revenue Service (FIRS) Establishment Act,2007 provides for FIRS and State Board of Internal Revenue (SBIR) to collaborate in issuance and administration of Taxpayer Identification Number (TIN) to all taxable persons (individuals and corporate).

These provisions were given effect by the constitution of the National Unique TIN Implementation / Steering Committee in July 2008, with the FIRS, states BIR and other key stakeholders as members of the JTB.

The Unique Taxpayer Identification Number (UTIN) is an initiative of the Joint Tax Board and it is basically an electronic system of tax registration, which would be instrumental to identifying taxpayers for life and would be available nationwide.

A harmonised national UTIN project is a strategic initiative of the Joint Tax Board (JTB) in which a national database of all taxpayers will be created.

The objective of the project is to carry out a successful roll-out and implementation of the Unique Taxpayer Identification Number (UTIN) for Nigeria and the development of a related data base linked to all relevant stakeholders in the Nigerian tax administration in order to bring Nigeria’s tax administration and practice in line with global best practices.

The overriding purpose is to ensure a seamless roll-out of the UTIN project, which will harmonise tax payer identification and registration in Nigeria.

A harmonised tax payer database will create closer linkages between the various institutions in Nigeria and will aid co-operation, information sharing and increased revenue accruing to all tiers of government.