JOURNAL OF BUSINESS DIVERSITY
Taxing Nigeria’s Emerging Digital Economy: A Vital Buffer to an Ailing Economy
Author(s): Abiola Adebanjo
Citation: Abiola Adebanjo, (2021) "Taxing Nigeria’s Emerging Digital Economy: A Vital Buffer to an Ailing Economy," Journal of Business Diversity, Vol. 21, Iss. 3, pp. 84-96
Article Type: Research paper
Publisher: North American Business Press
Abstract:
Think of Jumia or Amazon in retail, Uber or Bolt in ride sharing, Coursera or Udemy in your quest for knowledge and you will understand what digital services entails. Digital has to do with our gadgets, while economy refers to money or trade. These two otherwise disconnected terms are now yoked by a click necessitating new taxing rules across borders.
We use search engines, online advertising channels, e-commerce sites and subscription platforms daily. While some of these services are provided by Non-Resident Companies (NRC’s) that are not taxed, their resident competitors are easy targets for tax purposes.
With the digitisation of business solutions and cyberisation of the workplace, the Finance Act 2019 has finally replaced the concept of Permanent (PE) Establishment with Significant Economic Presence (SEP) in line with global trend.
It appears a digital economy will in a matter of time replace the traditional economy and if not rightly taxed will result in consequential losses for some countries. Nigeria should be ready for the next phase of taxation.
