E–Commerce And Tax Revenue

Beyond the Global System for Mobile Communications , the advent of the Internet and its related infrastructures in the recent times have accounted  for  the significant shifts and restructuring in the manner that business is transacted across the universe . A sizeable percentage of commercial activities is already being carried out electronically. However, considered from a different perspective, the growth in internet has been presenting some disturbing  challenge to the tax authorities’ traditional approaches to both direct and indirect taxation globally. For instance, e-commerce business model has several tax implications such as disintermediation, increased magnitude of cross-border transactions and digitization of information - to mention a few. These characteristics of e-commerce make it difficult to identify the source and destination of transactions.  Consequently, they create opportunities for high-level tax avoidance schemes and the resultant tax losses. These intrinsic challenges of e-commerce taxation explain the much debate and discussions that have taken the center-stage among stakeholders on how to regulate the internet while preserving the interests of all. This debate on the full implications of e-commerce for tax revenues is yet to be settled this paper seeks to explore the development of internet taxation and the related issues globally with particlar emphasis on Nigeria. The study observes that issues such as tax loss and tax evasion are significant just as the challenges like uncertainty and double taxation make the parties of e-commerce reluctant and affect the development of e-commerce negatively. As is the case with many other developing nations, Nigeria is gradually embracing e-commerce.