Abstract:

Technology, internet and e-commerce have redefined business models and practices such that values are created in environments different from where profits are earned and taxes are subsequently paid. Suchpractices, which exacerbatebase erosion and profit shifting, negatively affect the collectible tax revenues by governments in several jurisdictions including Nigeria,making it difficult for them to meet their social contract obligations to their citizens.Using an expost facto research design and qualitative research methodology, this exploratory study assessed the capacity of the Nigerian government to address the challenges imposed on its tax system by the emerging digitalized economy. The study observed that the issue of taxation in digitalized economy has not received the desiredlegislative and governancepriority attention largely because of the dearth of knowledge about its complexities as well as the undue dependence on revenue from crude oil.The study therefore recommends that the revenue authorities should set up a think tank comprising chartered accountants, tax practitioners, information technology experts, academics and regulators to develop a comprehensive framework to address the issue from a national perspective while the ECOWAS Commission should be prodded and supported by its member-states to take on the issue at the sub-regional level as OECD is currently doing for its member-states in Europe, USA, Japan and Canada.

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