DIGITAL TAXATION AND TAX REVENUE IN NIGERIA

Abstract

Internet technology and the digital space continues to create various sources of income across the globe. Cross-border businesses that are transacted over the web created new streams of income. These are electronic businesses or simply e-businesses and include online shopping, advert placements, digital/affiliate marketing, subscription for online services, etc. This is a distortion to known and conventional income avenues and has attracted the attention of national governments, who have been seeking new revenue sources to enable it meet up with its responsibilities. This paper therefore examined the impact of digital taxation on tax revenue in Nigeria. The methodology employed is systematic review which is descriptive and explanatory following review of secondary data and then making inferences. The paper focused on the gazetted Finance Act of 2020, SEP Order and continuous government responses in highlighting the inclusion of taxing the digital economy as a revenue source and identifying what key areas are in need of policy recommendations, which the paper then offered. Although several professional publications, academic journals and articles and electronic media publications have addressed some of the challenges of taxing the digital economy, there has been little systematic description on policy recommendations, unknown methodology for the computation of the assessable tax and scarcity of reliable statistical/numerical data due to the novelty of the digital tax. The paper concluded that the various tax authorities should continue to review and strength tax laws, educate the populate on the new digital tax and engage internet giants such as Amazon, Google, Yahoo, Facebook, etc and international organisations such as Organization of Economic Cooperation and Development (OECD) and United Nations to work together on enable it build capacity on global trends and ensure effective collection of the digital tax.