AN ANALYSIS OF REGULATORY REGIMES FOR THE TAXATION OF ELECTRONIC COMMERCE IN NIGERIA

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Author

Presented To

Department of Law

ABSTRACT
No doubt, the advent of Information and Communication Technology (ICT) has greatly impacted human interaction ranging from political, religious, social and business transaction. The Information and Communication Technology (ICT) has contributed in a no small measure to the advancement in business transaction as it has taken the manner and channel of commercial transaction beyond the traditional method. Electronic Commerce, though a terminology recently introduced to the psyche of the Nigerian commercial transaction, it is fast gaining ground as it has contributed to the Gross Domestic Development. However, instead of government at national and at international levels to be benefitting from e-commerce in term of revenue to the government, the reverse is the case. Globally, taxation is a vexed question, and taxing electronic commerce creates additional challenges. This notwithstanding, electronic commerce holds tremendous potentials as a formidable source of governmental revenue in the light of globalization and increasing automation of commercial transactions in Nigeria. National and states tax authorities are struggling to find mechanisms to collect the anticipated significant revenues derived from taxing e-commerce profit. Government is yet to feel the impact electronic commerce in terms of revenue generation to the government. Therefore, this work examined the factors proved to be responsible for this ugly situation ranging from the fact that there is no extant law regulating electronic commerce in Nigeria to the archaic law on taxation which makes it practically difficult if not impossible to bring cyber income within the tax box, the ubiquitous nature of cyberspace where this electronic commerce takes place is being exploited as an avenue to evade and avoid tax payment, non-characterisation of electronic commerce to e-commerce in tangible products, intangible products and in services. The work employed the doctrinaire research methodology in analysing some tax statutes relating to taxation, examining the challenges in taxation of e-commerce which includes difficulties in exercising jurisdiction to tax cyber income, displacement of physical presence in electronic transactions, difficulties in assessment and computation of cyber income and lack of wherewithal on the part of the tax authorities in tracing of electronic commerce. It is quite unfortunate that there is no extant law regulating e-commerce in Nigeria the result of which is loss of revenue to the government. The worked was concluded by recommendations which are as a matter of necessity required for effective and efficient means by which e-commerce can be taxed.