ADVANCING TAXATION IN NIGERIA THROUGH ARTIFICIAL INTELLIGENCE: CHALLENGES AND FRAMEWORK FOR ADOPTION

Abstract

Artificial Intelligence (AI) presents transformative opportunities for improving tax

administration globally and, in particular, provides avenues for Nigeria to strengthen revenue

mobilization, enhance taxpayer compliance, reduce leakages, and modernize service delivery.

Despite recent digitalization efforts—such as the introduction of TaxPro Max, automated VAT

collection infrastructure, and recent tax reforms—Nigeria continues to struggle with a low taxto-GDP ratio, weak compliance culture, administrative inefficiencies, and information

asymmetry. This non-empirical paper synthesizes recent scholarly and policy literature on AI

and taxation, identifies systemic challenges hindering AI adoption, and proposes a structured

framework for responsible and sustainable AI integration in Nigeria’s tax administration.

Challenges highlighted include data fragmentation, legal and regulatory uncertainty,

institutional capacity deficits, infrastructural weaknesses, algorithmic transparency issues, and

cybersecurity risks. The study proposes a detailed framework covering strategic alignment,

data governance, regulatory standards, institutional capacity building, ethical safeguards,

infrastructure enhancement, and continuous evaluation. The paper contributes to the evolving

discourse on modernization of Nigeria’s tax system and provides policymakers, revenue

agencies, and researchers with a practical model for structured adoption of AI.