Analytical Study of Research Gaps in Digital Economy Taxation in Nigeria

The digital economy creates new taxable activities that Nigeria's tax framework inadequately captures, and systematically examining the research gaps in this area provides an agenda for fiscal policy modernisation. This study analytically examined research gaps in digital economy taxation in Nigeria through systematic literature review and original analysis. A systematic scoping review of 10 databases identified 31 publications from 2019 to 2024 on digital economy taxation in Africa, of which only 4 specifically addressed Nigeria's tax challenges and none examined subnational digital economy tax dimensions. Original analysis estimated the digital economy tax gap using data from NITDA, CBN fintch regulatory reports, and FIRS tax collection statistics. The estimated annual digital economy tax gap was N480 to N760 billion at the federal level, driven by under-taxation of e-commerce transactions, digital services provided by non-resident entities, and crypto asset transactions. The FIRS Finance Act 2021 provisions for digital services taxation had achieved only partial implementation. Four critical research gaps were identified: absence of taxpayer compliance behaviour studies in digital contexts, limited subnational digital tax authority analysis, understudied tax challenges from crypto assets, and inadequate research on digital economy tax administration capacity. The study proposes a Nigerian Digital Economy Taxation Research Agenda and recommends FIRS establishing a dedicated Digital Economy Tax Unit, collaborating with OECD Pillar One and Two implementation working groups, and commissioning taxpayer compliance experiments in the digital sector.

Keywords: digital economy taxation, tax gap, Nigeria, e-commerce, fiscal policy