CHALLENGES AND PROSPECTS OF THE NIGERIA TAX ACT 2025 AND ITS IMPLICATIONS ON DIGITAL SERVICES TAXATION

Abstract

This study examined the challenges and prospects of the Nigeria Tax Act 2025 and its implications for the taxation of digital services. It was motivated by the need to assess the effectiveness of recent tax reforms in addressing the complexities introduced by the digital economy, particularly the taxation of digital services and cross-border digital transactions. The study evaluated the extent to which the Act responded to existing gaps in Nigeria’s tax framework and its impact on revenue generation and tax administration. The doctrinal research methodology was adopted, and reliance was placed on primary and secondary legal sources, including statutes, policy documents, and judicial decisions. The study found that the Nigeria Tax Act 2025 introduced significant reforms aimed at expanding the tax base and improving the taxation of digital services, including provisions relating to non-resident digital service providers and the digital economy. The study recommended continuous legislative review, strengthened institutional capacity, clearer regulatory frameworks, improved digital tax administration systems, and enhanced international cooperation to ensure effective implementation of digital taxation provisions. The study concluded that while the Nigeria Tax Act 2025 represented a major reform in Nigeria’s tax system, its effectiveness in addressing digital services taxation depended largely on consistent implementation, among others.