Digital Financial Infrastructure, Tax Compliance, and Revenue Mobilisation in Nigeria: A Systems Perspective

This doctoral study develops a systems-level theoretical and empirical framework examining how digital financial infrastructure, including mobile payment networks, bank verification number integration, and real-time gross settlement systems, shapes tax compliance behaviour and revenue mobilisation capacity in Nigeria. The rapid expansion of Nigeria's digital financial ecosystem, driven by fintech innovation and CBN regulatory mandates, creates unprecedented opportunities for the FIRS to leverage third-party financial data in compliance verification and base-broadening. However, a coherent theoretical account of the mechanisms by which digital financial infrastructure translates into compliance improvements has not been developed for developing economy contexts. This study constructs a two-sided market model in which digital financial infrastructure reduces the information asymmetry between tax authorities and taxpayers, endogenously increasing the probability of non-compliance detection and thereby shifting the evasion equilibrium. The model is estimated using a generalised method of moments approach applied to a unique panel dataset combining state-level digital payment adoption statistics from the CBN, FIRS revenue performance data, and the Nigeria Financial Inclusion survey. An instrumental variable strategy exploiting variation in 4G mobile network rollout timing across states addresses endogeneity in digital adoption. The study expects to find that a one standard deviation increase in state-level digital payment adoption is associated with a 12 to 18 percent increase in self-reported taxable income, consistent with the information mechanism. Keywords: digital financial infrastructure, tax compliance, revenue mobilisation, fintech, information asymmetry.