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THE NIGERIAN TAX POLICY ON E-COMMERCE ON SOCIAL MEDIA: A STUDY OF E-INFORMAL SECTOR

Abstract

Currently e-commerce has developed to be a vital part of business activities and our daily lives. The effects of globalization and swift developments are experienced in information and technology level of e-commerce. Tax administrators in Nigeria are being confronted with myriads of challenges and difficulties adapting to the new information technology, “digitalization”. They aimed at examining the effect of adoption of e-taxation on revenue generation in Nigeria on social media companies operating in Nigeria’s Internet domain. The study adopted a causal research design. This is a design which explores the effect of one variable on another. The study revealed that an element of change in the standard regulations among the tax authority (FIRS) for about 5.221, will give way for benefits of revenue generation within social media companies operating in Nigeria’s Internet domain, which explains that FIRS faces challenges on modalities of taxing online companies and they can do more by implementing policies in consonant with social media companies in Nigeria. The study concludes that the country’s major challenge of e-commerce as it relates to its tax system has been that the laws governing direct taxes are at the moment inadequate and out of date; they are premised on the concept of permanent establishment as defined in the double tax treaties and recommend that efforts should be made to set up a tax intermediation body. This body ought to be relevant for the digital world, utilize Internet Service Providers (ISPs) as a responsible authority for the collection, calculation and payment of electronic tax.

Keywords

Tax, Policies, E-Commerce, Revenue, Social Media

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