TAXATION OF DIGITAL ECONOMY IN NIGERIA: CHALLENGES AND PROSPECTS

Abstract

One of the most significant sources of income for governments worldwide is taxation. But, taxing the digital economy has been a major concern for nations across the globe. Hence, this paper assesses taxation of digital economy in Nigeria by exploring it prospects and challenges. The paper has Smith’s theory of taxation as its theoretical framework. The paper reviewed past literature to draw conclusion. It was revealed that taxing the digital economy in Nigeria has several prospects, including increasing tax revenue for the government, broadening the tax base, and reducing the likelihood that the government will take out loans among others. The paper comes to the conclusion that, despite Nigeria's prospects for taxing the digital economy, difficulties with tax administration, tax planning, and tax compliance have made it unlikely that these opportunities will be realized. Based on the conclusion, it is recommended that an empirical studies being conducted to investigate the effect of tax administration, tax planning, and tax compliance as dimensions of taxation of digital economy in Nigeria.