Dr. Ehima

The study examines the influence of the digital economy on the effectiveness of tax administration in Nigeria. Despite the rapid growth of Nigeria’s digital sector—valued at over ₦150trillion in transactions by 2020—the nation’s tax-to-GDP ratio remains one of the lowest in Africa, at about 6%. This paradox underscores inefficiencies in traditional tax administration and highlights the need for digital transformation. The research employed a survey design, drawing data from 100 respondents comprising staff of the Federal Inland Revenue Service (FIRS), State Internal Revenue Services (SIRS), registered taxpayers, and tax consultants. Primary data were collected through a structured questionnaire validated by experts, with reliability confirmed via Cronbach’s Alpha (0.78). Descriptive statistics, Chi square tests, and multiple regression analysis were used for data analysis. Findings revealed that the digital economy significantly enhances tax administration effectiveness by improving transparency, expanding the tax base, and reducing opportunities for corruption and leakages. Technology infrastructure was found to play a vital role, though challenges such as poor internet connectivity and weak system integration persist. Furthermore, a strong positive relationship was established between digital economy adoption and tax revenue performance, indicating that greater digital inclusion promotes sustainable revenue mobilization. The study concludes that while Nigeria has made progress through digital tax reforms, infrastructural and awareness gaps still hinder full optimization. It recommends increased investment in ICT infrastructure, improved taxpayer sensitization, and stronger institutional capacity to leverage digital tools for efficient and transparent tax administration