Taxation of the Digital Economy: An Integrated Review and Policy Implications for Nigeria

• Naja’atu B. Rabiu

The rapid expansion of the digital economy has transformed global business models, enabling cross-border trade in goods, services, and data without the need for physical presence. This evolution has exposed the limitations of traditional tax principles based on territorial nexus and physical asset attribution. This study conducts an integrated review of literature from 2014 
to 2024 to examine how Nigeria and other economies are addressing the taxation of digital activities. Drawing on theoretical frameworks, empirical evidence, and policy analysis, it evaluates Nigeria’s legislative reforms, such as the extension of value-added tax (VAT) to foreign digital services and the adoption of Significant Economic Presence (SEP) rules, alongside administrative innovations and participation in global tax negotiations. Findings reveal that these measures have expanded the tax base and generated measurable revenue gains, yet challenges persist in enforcement, infrastructure readiness, taxpayer awareness, and skills capacity. Comparative experiences from other jurisdictions demonstrate that effective digital taxation requires a combination of robust legal frameworks, technology-driven administration, and regional or global policy coordination. The paper concludes that Nigeria can transform digital taxation into a sustainable driver of revenue and economic growth by 
strengthening enforcement capacity, upgrading infrastructure, enhancing human capital, promoting taxpayer compliance, refining legal provisions, and leveraging regional and international cooperation.

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