Taxation of Digital Goods and Services in the Nigeria Legal System: Challenges and Opportunities

Abstract

The rapid growth of the digital economy has exposed significant flaws in traditional tax systems. This is because the current tax framework fails to address the intangible nature of digital transactions, borderless operations, and complex value chains, resulting in tax avoidance and evasion. The study tackles the complex issue of taxing digital goods and services, asserting that a coordinated international approach is essential to ensure fairness, efficiency, and neutrality. It responds to the question of how can governments effectively regulate and tax digital goods and services while promoting economic growth, innovation, and international cooperation. In answering the above question, the study employs a mixed-methods approach, combining doctrinal analysis of international tax law, case studies of OECD, EU, and country-specific initiatives, and expert opinions of tax policymakers and industry representatives. The findings of the study highlights clear tax jurisdiction guidelines; standardized digital tax reporting and adaptive tax frameworks. It recommends, amongst other things, that: the government should implement coordinated international tax standards and design flexible tax systems accommodating evolving digital business models