Taxing the Informal Digital Economy in Nigeria: A Legal Pluralist Perspective

The rapid expansion of Nigeria’s informal digital economy, driven by widespread mobile and internet access, has created new avenues for income generation through platforms such as WhatsApp, Instagram, TikTok, and Facebook. However, this growth has largely occurred outside the reach of Nigeria’s formal tax system, resulting in significant revenue loss and questions of fairness. This paper examines the legal and practical challenges of taxing the informal digital economy in Nigeria, adopting a legal pluralist perspective that recognizes the interplay between formal tax laws, informal socio-economic norms, and lived realities of digital entrepreneurs. Employing a doctrinal and socio-legal methodology, the study analyses existing legislation, including the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025, alongside secondary literature on informality, digital commerce, and tax compliance behaviour. The paper identifies key obstacles, including inadequate data, the borderless nature of digital transactions, weak enforcement, and low public trust, which undermine effective taxation. It critically evaluates the presumptive tax regime introduced under the new tax laws as a legislative response to these challenges, and argues that rigid, formal tax rules must be complemented by technology-driven administration, public education, and inclusive stakeholder engagement to achieve a fairer, more effective, and sustainable tax system for Nigeria’s evolving digital economy.