The paper examined the effect of digitalization of economy on tax compliance in Nigeria. The researcher adopted the survey strategy and use structured questionnaire to collect data. The data was sourced from the Federal Inland Revenue Service (FIRS)in AkwaIbom State. The data was collected from the entire population of the staff at the FIRS, which was forty (40). The simple percentage, descriptive statistics, and linear regression techniques were used to analyze the data. The results suggest that tax compliance is negatively influenced when economy is digitalised. It is therefore recommended that the government of Nigeria should consider developing tax policy that would aid taxing e-transactions, tax education and including taxation of e-transactions in the tax laws. Doing so would likely improve tax compliance and thus boost digital transactions contribution to government revenue.