THE IMPACT OF E-COMMERCE ON TAX REVENUE IN NIGERIA

Abstract

As Nigeria seeks to diversify its economy and reduce its dependence on oil revenues, tax revenue from non-oil sectors, including e-commerce, has become increasingly important. This study is timely as it contributes to the broader discussion on revenue diversification by examining how the rapidly growing e-commerce sector can be effectively taxed to support national development goals. Therefore, this study investigated the relationship between e - commerce and tax revenue. The sample size of the study consist of two hundred and eighty (280) staff of FIRS and RIRS in Rivers State out of nine hundred and thirty eight (938) staff of the Revenue Services using Taro Yamane formula for sample size determination of 1967. Primary data on e - commerce and tax revenue were collected from respondents using the questionnaire instruments. Data were analysed using descriptive and Pearson Correlation Coefficient Statistical tools with the aid of Statistical Package for Social Sciences (SPSS) version 23.0. The findings at 0.05 level of significance reveals that business models has a positive and a moderate relationship with tax revenue (r = 0.567**), payment system has a positive and a moderate relationship with tax revenue (r = 0.595**) and technology has a positive and a moderate relationship with tax revenue (r = 0.535**). Based on the findings, it was concluded that e – commerce has significant relationship with tax revenue. Therefore, the study recommends that the government should invest in modern tax collection technologies, such as automated transaction tracking systems, to monitor digital sales more effectively since e-commerce business models operate largely in the digital space. Finally, the government should adopt advanced digital tax systems, such as electronic invoicing, automated tax filing, and payment systems that integrate directly with e-commerce platforms.