By David A. OSEI
We live in a world of so much innovation that it is easy to forget how much of it actually goes on. Innovation is the central plank of our existence. Imagine five years ago how people used to carry cash to GRA offices to make tax payments. The risk exposure of this task was enormous for both the taxpayers, tax administrators and the government.
The TADAT diagnostic tool which is used to determine the health status of Tax administration opined the need to inculcate technology-based innovation in revenue administration. I read somewhere that the world did not move from the stone age to bronze age because we ran out of stones but because of innovation.
Currently there are a lot of research that focus on how the emergence of Artificial Intelligence (AI) will cause exponential growth in the world GDP. PwC research shows global GDP could be up to 14 percent higher in 2030 as a result of AI. This is equivalent to an additional US$15.7 trillion making it the biggest commercial opportunity in today’s fast changing economy.
As a developing nation, it is crucial to take advantage of this to rope in more revenue to our economy. Whilst in the past, many people would have expected Africa to adapt a new technology many years or even decades after it became available in developed economies, this is no longer the case.
As has been the nexus in all advanced nation, innovation is best done by the entrepreneurs and not the state. The State only provides the conducive environment for the growth of innovators. Many young enthusiasts are leading the charge in the recent AI revolutions in Africa by developing products that solve our problems from Agriculture to e-commerce. A recent IMF studies points to the need for government to enact policies for AI, provide enabling environment for AI to thrive, empower the citizens in education and enact laws to regulate its use.
As the nation embraces the wave of AI innovations, there will be a lot of opportunities for the government to realize its revenue target to finance its expenditure. The Solow Growth Model explains that the rate of technological progress in an economy causes exponential growth in GDP with changes in population growth rate and savings rate.
However, in financial model used by Peter Drucker, innovations that cut costs will lead to revenue maximization when effective marketing strategies are employed. When we intertwine these theories, we can deduce more improvements are needed to actually achieve government’s medium tax-to-GDP targets.
It is worrisome to note that despite great strides to inculcate innovations in GRA operations, the cost of compliance has not reduced.
These high costs include the robustness of taxpayers database, the necessary information and support needed by taxpayers to comply voluntarily, the intermittent network loss in the filing and payment of taxes, the capacity of tax officials, the delay in dispute resolutions and the need of tax administrators to be answerable for the way they use public resources and exercise authority.
In addressing these factors, the Commissioner General during the 12th Annual International Tax conference held in August stated that GRA is shifting from a rigid enforcement strategy to a more collaborative and customer centric approach. This is a great stepping stone in reducing compliance cost thereby maximizing tax revenues.
As we leapfrog in this fast pace technological innovations, AI should be infused in all the products and services rendered by GRA. This approach will maximise tax revenue by using AI to improve productivity and cut cost.
It is well known that if one can cut the time it takes to do something well, it can save money or make more money with the extra time. Basically, there are thousands of off-the-shelf apps available which can be infused or deployed in our business model including Microsoft CoPilot or Gemini as our chatbot assistant. When effectively done, it can cut cost of compliance by 10-20 percent whiles improving deliverables in our services.
>>>is a member of CITG, TADAT Trained Assessor, Big data analyst, Forensic Investigator, MAGA enthused and staff of GRA
