E-COMMERCE IN NIGERIA AND THE IMPACT OF ONLINE VALUE-ADDED TAX

BACKGROUND OF THE STUDY: In many developing nations, such as Nigeria, the Value-Added Tax, sometimes known as VAT, has become an important source of revenue (Ijewere, 2022). In sub-Saharan Africa, for instance, value-added tax (VAT) has been implemented in the Republic of Benin, Côte d'Ivoire, Guinea, Kenya, Madagascar, Mauritius, the Republic of Niger, Senegal, and Togo. Other countries in the region include Togo and the Republic of Niger. According to the available evidence, value-added tax (VAT) has developed into a considerable contributor to the overall tax income of governments in these nations. According to Ajakaiye (2000), the Value Added Tax Decree was enacted in 1993 and made mandatory the following year. The Value-Added Tax, or VAT, is an ideal type of taxation in the Nigerian tax system. It has made a significant contribution, both to the economic process of resource mobilization and to the process of capital development. This has a favorable and large influence on the country of Nigeria's ability to generate revenue; he also has a positive association with the country's level of consumption (Isah, 2021).

A financial burden or other privilege imposed on a taxpayer (natural or legal person) by a state or the functional equivalent of a state, such that non-payment, fraud, or resistance to collection is punishable by: law A tax is a financial burden or other privilege imposed on a taxpayer (natural or legal person) by a state or the functional equivalent of a state. A large number of administrative units also levy their own taxes (Fregman, 2021). Taxes can be classified as either direct or indirect levies, and they can be settled either monetarily or in labor hours. The amount of money that is brought in by the tax authorities is directly proportional to how much that economy is taxed and how much the government spends on economic policy overall. The Nigerian federal treasury is legally obligated to levy taxes on people and legal persons operating in both the public and private sectors of the economy. This responsibility falls under the purview of Nigeria's taxation laws. Tax authorities now have complete independence to conduct tax evaluations, collections, and registrations. Because of the favorable climate that has developed as a result of Section 8 (q) of the FIRS Establishment Law 2007, the tax administration in the nation has been able to see significant improvements (Ijewere, 2022).

The term "e-commerce" refers to the process of buying, selling, and marketing products and services to consumers or end-users through the use of communication technologies, most notably the Internet. The Internet has caused a fundamental shift in national economies that were previously isolated from one another by a variety of factors, including barriers to cross-border trade and investment; physical distance; differences in time zones and languages; and national differences in governmental regulations, culture, and ethnic trade systems (Fregman, 2021). E-commerce creates a level playing field for large companies as well as small and medium-sized enterprises (SMEs) in the global marketplace. Additionally, e-commerce makes it possible for businesses and regional communities to participate in social, economic, and cultural networks without any problems despite the fact that they are located in different countries (Mary-Anne, 1998).

When major corporations transfer the money received from their consumers to the providers of the goods or services that were purchased, they incur administrative fees. Taxes are not different. The quantity of resources that may be used by the government is never equal to the amount of resources that are collected from the public in the form of taxes. The Nigerian National Tax Policy (NTP) lists the removal of bottlenecks and leaks in the Nigerian tax system as one of the primary goals that it seeks to accomplish. As a result, it is necessary for tax authorities at all levels in Nigeria (state, federal, and municipal) to locate all potential points of entry in the Nigerian tax system and to either reduce or eliminate the number of such leaks (Isah, 2021). It is common knowledge that income is lost at three different stages: the appraisal stage, the collecting stage, and the usage stage.

1.2 STATEMENT OF THE PROBLEM

The trend with technology is that new patterns of business interaction develop as companies and consumers participate in an increasingly virtual or electronic marketplace and reap the benefits. New technologies have made it possible to pay for goods and services through the Internet and, in many cases, replace the need to manage physical money (Isah, 2021). However, the advent of electronic commerce as a result of the development of the Internet has given rise to a series of legal and socio-economic problems. Despite its promises, the problem is that the Internet does not have clear and fixed geographical transit lines that traditionally characterize the physical trade of goods and services. It is in this context that we should try to provide an overview of the legal framework of regulation, legal problems and prospects for the development of electronic commerce in Nigeria (Fregman, 2021).

Nigeria is transforming into information technology and information technology, its laws are not yet well adapted to this transition. Laws should not only be applicable to electronic commerce innovations, but should also be proportional to the legal evolution of electronic business and consumer protection. Given the aforementioned problems in which online or online commerce exists, the profits of this electronic commerce are not reflected in our income speeches unless they are subject to taxes (Ijewere, 2022). Electronic commerce generally refers to commercial activities based on the processing and transaction of digitized data, including text, sound and visual images, which ultimately result in an exchange of value in telecommunications networks. In general, it is perceived as the purchase and sale of products or services through electronic systems such as the Internet and other computer networks. The products are sold, advertised, sold, paid and delivered through the services of a website through the Internet. By assessing its relevance, electronic commerce reduces the costs associated with marketing, customer service and the burden of operating infrastructure, increasing the amount of funds available for profit-making investments (Isah, 2021). E-commerce has remodeled the basics of commerce and has brought many benefits to people and businesses. Every day more and more goods and services are bought and sold online. In fact, some goods and services are bought and sold virtually online without any physical or material equivalent. In Nigeria, VAT is one of the instruments established by the federal government to generate additional income. However, most known Nigerians and interest groups have spoken out against its introduction. It seems that VAT poses some problems (Isah, 2021). For the purposes of this document, we will examine the impact of VAT on income generation in Nigeria and its impact on Nigeria's economic growth.