Journal • CITN Journal

Editorial Board

Editor-in-Chief

Professor Rafiu Oyesola Salawu

Department of Management & Accounting, Faculty of Administration, Obafemi Awolowo University, Ile-Ife

Managing Editor

Professor Godwin Emmanuel Oyedokun

Department of Management & Accounting, Lead City University, Ibadan, Nigeria

Editorial Board Secretary

Mary-Fidelis Chidoziem Abiahu

Director, Research and Professional Standard, Chartered Institute of Taxation of Nigeria

Editorial Board Members

Professor Chinedum Nathaniel Nwezeaku

Federal University of Technology, Owerri

Professor John Adeoti

Nigeria Institute of Social and Economic Research (NISER), Ibadan

Professor Uche Jack-Osimiri

Faculty of Law, River State University, Port Harcourt

Professor Aruwa Suleiman Akwu-Odo Salihu

Nasarawa State University, Keffi Nasarawa State Nigeria

Dr. Eiya Ofiafoh Ofiafoh (Associate Professor)

Department of Accounting, University of Benin, Benin City, Nigeria

Dr. Stephen Chukwuemeka Mark Abani

MCSA Worldwide Projects Limited, Abuja, Nigeria

Dr. Kenny Adedapo Soyemi

Department of Accounting, Olabisi Onabanjo University, Ago Iwoye, Ogun State, Nigeria

Professor Joseph Uchenna Uwaleke

Department of Banking & Finance, Nasarawa State University, Keffi Nasarawa State, Nigeria

Barrister Chukwuemeka Eze

Faculty of Law, Nasarawa State University, Keffi Nasarawa State, Nigeria

Mr. Simon Nwanmaghyi Kato

Federal Inland Revenue Service, Chairman’s Office, Abuja, Nigeria

BRIDGING TAX GAP IN NIGERIA THROUGH TAXATION OF DIGITALIZED COMPANIES: ANY PROSPECT?

Description

BRIDGING TAX GAP IN NIGERIA THROUGH TAXATION OF DIGITALIZED COMPANIES: ANY PROSPECT?

Authors

Nwaobia, Appolos Nwabuisi and Akintoye, Ishola Rufus

Abstract

The emergence of the digital economy and digitalized transactions has been a global concern as they have raised new challenges to tax authorities. Volumes of transactions are completed by entities online without physical presence in the country. National tax laws have not kept pace with the globalization of corporations and the digital economy, thus leaving gaps that have been exploited by multi-national corporations and the digitalized companies to avoid and evade taxes. The impact has been reported widening of tax gaps, dwindling tax revenues and effective tax rates and low economic growth. Taxation of digital companies is an emerging issue for which there is scarcely any empirical study anywhere but a lot of work and reports by OECD and G20 addressing the challenge are available. The study examined the prospects of bridging tax gap in Nigeria through the taxation of digitalised companies. Desk review and analytical research approaches were adopted. Literature on the areas of tax gap as well as digitalization and taxation challenges were reviewed. Sections of available legal framework on taxation of companies were also consulted and analysed in the context of taxation of digitalized companies. Reports of works by OECD and G20 were reviewed and assessed with a view to deriving policy direction from them that may inform action in the Nigerian context. Findings reveal lack of wholistic legal and tax administrative frameworks as well as intelligence gathering structures for the taxation of digital transactions in Nigeria. The study concluded that Nigeria can leverage on the works and recommendations of OECD, G20 and EU as well as recent practices in some jurisdictions in addressing the tax challenges of the digital economy. The following imperatives for the taxation of digitalized companies in Nigeria were recommended, namely collaboration and multilateral agreements for exchange of information, fully digitalized tax administrative system with corruption resistant tax structures, robust tax laws and taxation framework and strong and equitable tax systems that can enhance taxpayers' trust in government and tax authorities.

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