Digital Financing and Taxation in the 4^th Industrial Revolution: Evidence from Nigeria

Abstract

The research investigates the consequences of digital financing on taxation in the fourth industrial revolution, with a focus on Nigeria. The primary goal of industry 4.0 characteristics is to increase income in both the municipal and private sectors. As a result, the government's embrace of digital finance is expected to increase tax revenue collection in Nigeria. In this study, we examine the effectiveness of digital financing instruments such as ATMs, point-of-sale terminals, and web-based or internet-based payments in increasing tax collection in Nigeria. Because the first statistics on digital finance recorded by CBN annual reports were published in 2006, the analysis spans the years from 2006 to 2019. We use multiple regression approaches to assess the effect of each digital financing tool and discover that only ATM has a substantial influence on tax income over the research period. Other digital finance gadgets have statistically negligible results. As a result, the study suggests that Nigeria's network be improved, as well as tax payers' knowledge and usage of digital finance instruments in order to comply with their tax responsibilities.

Exploiting Technology during the Pandemic: Early Lessons from Sub-Saharan Africa

“…It is noted that Nigeria had modified its corporate tax legislation to enable the taxation of nonresident digital businesses between 2019 and 2020. Notwithstanding gains made thus far, existing literature points to the need for the authorities in Nigeria to improve digital networks, and enhance taxpayers' knowledge and usage of digital finance instruments to comply with their tax responsibilities, including those that are transnational [49,50].…”

Foreign Direct Investment and Information Communication Technology Taxation Effects on Tax Income Growth

“…Despite the low rate of FDI in certain countries, the broad use of ICT in this industry 4.0 has extended across nations. ICT aids Nigeria in a variety of ways, including the usage of internet services, sophisticated contemporary phones, digital banking services [29], online tax filing [30], remote employment options, online marketing and advertisement, and so on. In the middle of all of these technical advancements, the Nigerian government thought it would be prudent to tax enterprises substantially involved in telecommunications, internet services, banking, and financial services individually on the technological advancements brought into the country.…”