Impediments of Electronic Commerce as a Tax Revenue Facilitator in Nigeria

Joe Duke, Sunday Efiok, Kechi Kankpang, Emmanuel Emenyi


This study measures the contributions of e-commerce activities to the national tax revenues in Nigeria, against the background of some country-specific problems. Using a data set spanning between 2008 and 2011 we develop a model that measures the statistical significance of indirect taxes sourced from four proxies of e-commerce: Automatic Teller Machines (ATM); Point-of-Sale (POS); On-line Purchasing (Internet Purchasing); and, Mobile Phone Payment (GSM). We find that e-commerce transactions have a very low overall contribution to the national tax revenue. We also find that while tax revenue contributions from ATM and POS are relatively significant, those from Internet Purchasing and GSM are insignificant. We recommend Public-Private-Partnerships between government and firms in developing the infrastructures required for improving the current level and depth of Internet and telephony usage. Consumer education is also recommended for improving awareness of the benefits of e-commerce transactions. Further research into the behavioural and infrastructural causes of the current low level of tax remittance from e-commerce transactions by sellers is recommended.

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International Business Research  ISSN 1913-9004 (Print), ISSN 1913-9012 (Online)

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