AN EXAMINATION OF THE LEGAL FRAMEWORK FOR ELECTRONIC COMMERCE TAXATION IN NIGERIA: THE FINANCE ACT 2019 IN PERSPECTIVE*

Abstract

Electronic commerce is the marketing, selling and buying of products and services on the internet. Prior to the enactment of the Finance Act 2019, the Nigerian Tax law and regime did not envisage the emergence of electronic commerce and online transactions of economic nature. The reality however is that there has been advancement in Information and Communications Technology (ICT) worldwide thus making the world a global village. The rate of transactions of taxable nature that are carried out virtually is increasing by the day and as without the legal framework for its taxation, they escape taxation by the Nigerian Government and this is a revenue loss to the Government. This paper examined how e-commerce was taxed prior to the enactment of the Finance Act 2020 and how the Act has brought e-commerce into the Nigerian tax net whether it is transactions between Nigerians or non-Nigerian residents and a Nigerian resident. This paper examined the framework for taxation of electronic commerce under four major tax laws, that is, Personal Income Tax Act, Companies Income Tax Act, the Value Added Tax Act and the Finance Act. The authors adopted the doctrinal research methodology. Theorizing with the aid of laws, books and case laws the paper highlighted the position of these tax laws on e-commerce taxation and made suggestions on how these laws can be improved to ensure that Nigeria as a developing economy does not lose out on the revenue that e-commerce generates.