FIRS PPM 4 Understanding the Internal Data Sources and Records - Prof Oyedokun.pptx

Training Session Organised by Peculiar People Management (PPM) for staff of the Federal Inland Revenue Service Held at FIRS Training School, Agidingbi, Ikeja, Lagos on Monday, October 13, 2025.

1. Understanding the Internal Data Sources and Records Prof. Godwin Emmanuel Oyedokun Professor of Accounting and Financial Development Department of Management & Accounting Faculty of Management and Social Sciences Lead City University, Ibadan, Nigeria Principal Partner; Oyedokun Godwin Emmanuel & Co (Accountants, Tax Practitioners & Forensic Auditors) Being a Training Session Organised by Peculiar People Management (PPM) for staff of the Federal Inland Revenue Service Held at FIRS Training School, Agidingbi , Ikeja , Lagos on Monday, October 13, 2025.

2. ND (Fin), HND (Acct.), BSc. (Acct. Ed), BSc (Fin.), LLB., LLM, MBA (Acct. & Fin.), MSc. (Acct.), MSc. (Bus & Econs ), MSc. (Fin), MSc. ( Econs ), Ph.D. (Acct), Ph.D. (Fin), Ph.D. (FA), CICA, CFA, CFE, CIPFA, CPFA, CertIFR , ACS, ACIS, ACIArb , ACAMS, ABR, IPA, IFA, MNIM, FCA, FCTI, FCIB, FCNA, FCFIP, FCE, FERP, FFAR, FPD-CR, FSEAN, FNIOAIM, FCCrFA , FCCFI, FICA, FCECFI, JP Prof. Godwin Emmanuel Oyedokun Professor of Accounting and Financial Development Department of Management & Accounting Faculty of Management and Social Sciences Lead City University, Ibadan, Nigeria Principal Partner; Oyedokun Godwin Emmanuel & Co (Accountants, Tax Practitioners & Forensic Auditors)

3. Understanding the Internal Data Sources and Records

4. Contents

5. Introduction Internal Data Internal data provides the foundation for detecting noncompliance early and accurately, enabling proactive intervention Strategic Targeting Enables targeted audits and efficient resource allocation through data-driven insights Risk Assessment Supports sophisticated risk assessment models to prioritize enforcement activities effectively Goal: By fully understanding internal data sources and records, FIRS can detect non-compliance, reduce tax evasion, and improve service delivery to compliant taxpayers while identifying compliance gaps and designing targeted engagement strategies.

6. Defining Internal Data Sources and Records Internal Data Sources All data sets created, collected, or maintained within FIRS and other government agencies during daily operations. Internal Records Organized documents (digital or physical) that capture taxpayer interactions, financial transactions, and administrative activities. These sources create a comprehensive taxpayer profile for sophisticated compliance analysis. Tax Returns & Filed Documents Individual, corporate, VAT, and specialized tax filings Taxpayer Registration Data TIN records, demographic details, business profiles Information Returns Data from employers, banks, financial institutions Historical Audit Records Past examination findings and compliance history

7. Strategic Benefits of Internal Data Utilization Benefit Explanation Early Detection of Non-Compliance Cross-checking returns with payment records highlights discrepancies and gaps quickly, enabling immediate intervention Risk-Based Audit Selection Data-driven profiling ensures limited audit resources focus on highest-risk taxpayers for maximum impact Tailored Taxpayer Education Understanding filing patterns and common errors helps target outreach and education programs effectively Policy Insights Comprehensive trend analysis informs evidence-based tax policy adjustments and reforms Revenue Forecasting Accurate historical data improves budgeting accuracy and revenue projections for planning

8. Best Practices for Internal Data Management Data Quality Management Standardize data formats across all systems Remove duplicates and inconsistencies regularly Implement automated validation rules Update records in real-time where possible Robust IT Infrastructure Centralized data warehouses for unified access Cloud-based analytics tools for scalability API integration between disparate systems Backup and disaster recovery protocols Data Governance & Privacy Compliance with Nigeria Data Protection Act Role-based access controls and encryption Regular privacy impact assessments Staff training on data handling protocols Regular Data Audits Routine completeness and accuracy checks Performance monitoring and optimization Data lineage tracking and documentation Continuous improvement processes

9. Strategic Implementation Framework Mapping and Cataloguing Data Assets Create comprehensive inventory of all internal databases and record types. Document ownership, format (structured/unstructured), update frequency, and data relationships for complete visibility. Data Quality Assessment Systematically evaluate accuracy (error-free entries), completeness (no missing critical fields), and timeliness (current and up-to-date information). Institute routine cleansing and validation procedures. Integration and Interoperability Link disparate systems (VAT, PAYE, Corporate Income Tax platforms) to create unified taxpayer view. Adopt standardized data formats to enable seamless system-to-system communication. Access Control & Security Define granular user permissions and ensure strict compliance with Nigerian Data Protection Regulation. Implement comprehensive audit trails for all data access and usage activities. Analytics and Visualization Deploy advanced business intelligence tools to identify critical patterns: non-filers vs. late-filers, industry-specific revenue leakages, and regional compliance heatmaps for strategic decision-making.

10. Critical Internal Data Sources for FIRS Source Content/Use Compliance Relevance TIN Database Personal and business registration data, demographic information Confirms taxpayer base, identifies dormant/duplicate TINs e-Filing & e-Payment Real-time filing and payment transaction records Detects under-reporting, payment delays, filing patterns Audit Records Historical findings, penalties imposed, compliance outcomes Tracks high-risk sectors and repeat offenders Withholding Tax Third-party withholding transactions and schedules Cross-checks compliance across supply chains Customs Integration Import/export volumes, duties paid, trade activity Flags discrepancies between trade and tax declarations Helpdesk Logs Taxpayer queries, complaints, interaction history Reveals pain points and emerging compliance challenges

11. Strategic Data Categorization Framework Operational Data e-Filing submissions, payment confirmations, withholding tax schedules, VAT returns, PAYE remittances Purpose: Critical for detecting under-declaration and conducting comprehensive trend analysis Third-Party Data Information from banks, employers' schedules, financial institutions' automated reporting Purpose: Provides cross-verification opportunities without external data requests Process Data Case management logs, audit trail metadata, officer performance records Purpose: Assesses internal efficiency and staff compliance with standard operating procedures System Metadata Login times, IP addresses, system-change records, access logs Purpose: Critical for cybersecurity, fraud detection, and organizational accountability

12. Advanced Applications and Integration Strategies Advanced Analytics Applications Predictive Modeling: Use historical behavior patterns to predict taxpayer default probability for next quarter Sector Benchmarking: Compare profit margins and tax payments across similar businesses to flag outliers Geo-Spatial Mapping: Overlay taxpayer data on maps to identify under-served areas and compliance gaps Inter-Agency Data Integration Blend CAC incorporation records, Customs import data, Immigration travel data into internal warehouse for comprehensive taxpayer profiling Financial Sector Collaboration Link with Nigerian Inter-Bank Settlement System (NIBSS) and CBN for large-value transaction monitoring and suspicious activity detection

13. Risk Assessment and Audit Selection Excellence Data-Driven Risk Scoring Advanced analytics applied to internal records identify highest-risk returns for audit selection, optimizing limited audit resources for maximum compliance impact Examination Types Correspondence, field, and office audits - each strategically informed by comprehensive internal data insights and risk profiling Compliance Optimization Efficient targeting improves overall compliance rates while reducing unnecessary taxpayer burden through precise, evidence-based selection Key Insight: Data-driven risk scoring transforms audit selection from reactive to proactive, enabling FIRS to achieve higher compliance rates with fewer resources while maintaining fairness and transparency in enforcement activities.

14. Leveraging Internal Data for Enhanced Compliance Risk Scoring Models Use predictive analytics to score taxpayers based on filing history, sector risk, and payment patterns for targeted interventions. Cross-Matching Techniques Compare VAT output vs. input declarations, or income tax returns vs. customs import values to identify discrepancies. Geo-Spatial Analysis Map taxpayer density vs. revenue to identify under-served regions and optimize resource allocation. Behavioral Insights Monitor service interactions to design nudges like SMS reminders for timely filing and improved compliance rates. Risk-Based Audits Use filing and payment history to identify high-risk taxpayers and prioritize audits where discrepancies are statistically significant. Automated Compliance Trigger reminders or penalty notices when filing deadlines are missed, ensuring consistent enforcement.

15. Practical Steps for FIRS: Leveraging Internal Data 01 Data Source Mapping Map and categorize all internal data sources relevant to tax compliance, creating a comprehensive inventory of available information assets. 02 Stakeholder Engagement Engage stakeholders across finance, legal, and IT departments to ensure data accuracy, accessibility, and cross-functional alignment. 03 Technology Investment Invest in integrated data warehouses and analytic tools tailored to local needs and compliance requirements. 04 Automated Monitoring Implement automated audit trail monitoring and timely security reviews to maintain data integrity and compliance standards.

16. Data Governance and Stewardship Data Steward Roles Assign dedicated officers responsible for data accuracy, regular updates, and security protocols in each department to ensure accountability. Data Ownership Policy Define which unit is accountable for each dataset, such as TIN database owned by the Registration Department for clear responsibility. Change Management: Document any structural change to a dataset, including new fields or data sources, to maintain comprehensive data lineage and traceability.

17. Data Quality and Security Challenges Access Log Vulnerabilities Incomplete or inaccurate login and access logs can mask unauthorized data access, compromising taxpayer information security. Manual Process Inefficiencies Manual review processes are inefficient and prone to error; automation is critical for timely detection of data anomalies. Vulnerability Response Delays Delays in remediating security vulnerabilities expose sensitive taxpayer data to significant risks and potential breaches. Governance Framework Gaps Robust governance frameworks are essential for maintaining taxpayer trust and ensuring long-term compliance effectiveness.

18. People, Process, and Technology: The Threefold Approach People Train staff on data governance, privacy regulations, and advanced analytic techniques to build institutional capacity. Process Establish clear protocols for data collection, validation, and compliance risk assessment across all departments. Technology Deploy scalable platforms for real-time data integration and advanced analytics capabilities. Skills & Capacity Building Advanced Analytics Training SQL, Python, or Power BI training for selected staff to run sophisticated queries and generate actionable insights. Data Interpretation Workshops Transform raw figures into actionable insights for enforcement teams through comprehensive training programs. Cybersecurity Awareness Recognize phishing attempts, data-breach indicators, and implement security best practices across the organization.

19. Legal and Ethical Considerations NDPR Compliance Ensure full compliance with Nigerian Data Protection Regulation for all taxpayer information handling and processing activities. Confidentiality Clauses Reinforce that internal data is privileged; unauthorized disclosure carries serious legal consequences and penalties. Audit Trail Requirements Every access or modification of taxpayer data must be logged and reviewable for accountability and transparency. "Data protection is not just a legal requirement—it's fundamental to maintaining taxpayer trust and the integrity of our tax system."

20. Challenges & Mitigation Strategies Challenges Mitigation Strategy Data silos across departments Establish comprehensive inter-departmental data sharing agreements and protocols Inconsistent data formats Enforce national data standards and implement robust validation rules Staff capacity gaps Continuous professional development programs in data analytics and interpretation Privacy concerns Strict adherence to Nigeria Data Protection Regulation (NDPR) requirements Legacy paper-based records Digitization initiatives and optical character recognition (OCR) implementation Cybersecurity threats Robust encryption protocols and regular penetration testing assessments

21. Illustrative Case Examples 1 Scenario A: Duplicate TINs Cross-checking the TIN database with e-filing records reveals duplicate registrations across multiple taxpayer accounts. Action: Merge records, flag for comprehensive audit, and improve registration controls to prevent future occurrences. 2 Scenario B: Unusual VAT Returns Industry benchmark analysis shows average VAT per turnover at 7%, but one company consistently reports less than 1%. Action: Automated red flag system triggers immediate follow-up investigation and compliance review. These real-world scenarios demonstrate how effective data analysis can identify compliance gaps and trigger appropriate enforcement actions.

22. Conclusion Strategic Foundation Internal data sources and records are indispensable for enhancing taxpayer compliance and building a robust tax administration system. Best Practices Implementation By adopting best practices in data management, security, and analytics, FIRS can strengthen enforcement and foster voluntary compliance. Future-Ready Administration The future of tax administration lies in data-driven decision-making—let's harness this transformative potential together. Recommendations Internal data sources empower smarter, fairer, and more effective tax administration Continuous enhancement of data systems and analytics is critical to closing the tax gap FIRS staff play a vital role in harnessing data to improve voluntary compliance and enforcement outcomes

23. Prof. Godwin Emmanuel Oyedokun Professor of Accounting & Financial Development Lead City University, Ibadan, Nigeria Principal Partner; Oyedokun Godwin Emmanuel & Co (Accountants, Tax Practitioners & Forensic Auditors) [email protected]; [email protected] [phone] & 2348055863944