Impact of Information Technology on Tax Administration in Nigeria

ABSTRACT This study investigates the impact of information technology (IT) on tax administration in Nigeria, focusing on its influence on efficiency, transparency, and tax compliance. IT adoption is expected to improve tax processes, but challenges like technological advancements, digital literacy, and system inefficiencies remain obstacles. The research aims to assess the improvements in tax administration due to IT, its role in expanding the tax base, and whether inefficiencies contribute to tax evasion. A survey of 50 respondents with diverse demographics was conducted, and Chi-Square analysis was used to test the hypotheses. Findings show that the hypothesis that IT-based tax administration positively affects tax generation and expands the tax base was accepted with a Chi-Square score of X² = 15.67, p < 0.05. The majority of respondents (76%) agreed that IT has improved tax processes, especially in filing, payment, and record management, while 80% noted increased efficiency, including reduced processing times and enhanced accuracy. The hypothesis that inefficiencies contribute to tax evasion was also accepted, with 70% of respondents identifying issues like inaccurate records and delays, supported by a Chi-Square score of X² = 13.42, p < 0.05. Despite improvements, challenges such as rapid technological changes, digital disparities, stakeholder resistance, and concerns about data privacy and cybersecurity persist, necessitating a strong regulatory framework. The study concludes that IT adoption has enhanced tax administration and expanded the tax base, but continued investment in IT infrastructure, better data security, taxpayer education, and efforts to mitigate stakeholder resistance are recommended to maximize IT’s potential in boosting tax compliance and revenue mobilization in Nigeria.