A data analyst at Oxfam International UK, Mr Olasunkanmi Omolola, has stated, that Nigeria has the potential to establish a robust, transparent, and efficient tax system through the strategic application of data science, essential for national development.
In a statement on Friday in Akure, Omolola highlighted the transformative impact of data-driven decision-making on the global economic landscape.
He explained how data science and artificial intelligence (AI) were revolutionising industries across the globe.
The analyst emphasised that in Nigeria, a nation with immense potentials yet significant challenges, the application of data science and AI in its tax system could usher in a complete revolution.
“A digital tax system underpinned by data science would ensure transparency and accountability, minimising leakages and boosting revenue,” he remarked.
He regretted that many states remitted alarmingly low tax revenues, a situation often attributed to manual processes and corruption.
“Transitioning tax collection to digital methods could mitigate these issues. By avoiding physical cash transactions, referred to as Archlaw Cash Payments, the government could ensure that more funds reach its coffers,” he said.
Omolola advocated the establishment of a centralised National Database or National Databank integrating taxpayers’ information.
He said that such initiative would enhance revenue collection.
“One key aspect of this system would be the introduction of a Security Identification Number (SIN) for all taxable entities.
“This unique identifier would link individuals and organisations to their financial activities, enabling authorities to track Value Added Tax (VAT) payments, monitor compliance, and detect tax evasion,” he added.
He also highlighted the importance of prioritising incentives such as tax holidays and concessions for priority sectors, which could attract investments to high-growth areas and ensure a balanced approach to tax reforms.
“The petroleum sector, traditionally the backbone of Nigeria’s economy, has experienced declining revenues due to over-taxation and regulatory uncertainties, discouraging investors.
“A data-driven tax regime could address this by assessing optimal tax rates to balance revenue generation with investor confidence.
“Similarly, data science could play a pivotal role in bridging gaps in the telecommunications and airline industries, using analytical tools to detect underreporting and ensure fair taxation.
“VAT collections, which significantly contribute to government revenue, could also benefit from real-time analytics and machine learning models,” he said.
He asked the government to invest in digital infrastructure, train professionals, and foster public-private partnerships.
“ Collaborations with technology firms could integrate advanced analytics tools into the tax system, while universities and training centres could develop a new generation of data scientists equipped to tackle Nigeria’s unique challenges.
“This shift towards data science aligns with global best practices, as seen in countries like Estonia and Singapore, where digitised tax ecosystems have achieved remarkable success.
“For Nigeria, such transformation would not only increase revenue but also rebuild public trust in governance,” he said.
According to him, a complete digital overhaul of Nigeria’s tax system, anchored by data science, is not merely aspirational but a necessity.
“By leveraging predictive analytics, automated tax collection systems, and secure digital payment methods, Nigeria can overcome inefficiencies, enhance compliance, and secure its economic future.
“While this effort demands vision, collaboration, and sustained investment, its potential to transform the nation’s fiscal landscape is immense,” he said.
