IMPACT OF CASHLESS BANKING AND CURRENCY REDESIGN ON TAX REVENUE GENERATION IN NIGERIA

Abstract

This paper examines the impact of the cashless banking and the redesign of the currency on tax revenue generation in Nigeria. It makes use of the doctrinal research methodology to recognise the tax prospectives of the cashless banking policy and the currency redesign initiative of the Central Bank of Nigeria. The research looks at currency redesign in other selected jurisdictions like, the United Kingdom, the United States of America and India to draw lessons from them. The study finds out that under the cashless policy, it is easier for the tax authority to fish out tax evaders. This is because the more electronic cash transactions people make, the easier it becomes for the tax authority to track their income and net worth. The currency redesign exercise also has the potential to make tax enforcement easier. This paper recommends the need for measures to be put in place by the government to ensure all necessary banking and digital payment infrastructure, the enabling legal framework to help the economies’ informal sector to accept the system of cashless payment, the enlightenment of members of the public to choose other available payment options, rather than a superfluous dependence on cash, and that Nigeria should put in place a long time plan for the phasing out of old bank notes. The paper concludes that the combination of the two will boost tax revenue and foster a more efficient tax system.

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