The AfCFTA Protocol on Digital Trade and the Challenge of Taxation: Problems and Prospects for Nigeria

Stephen Owie Ese
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Stephen Owie Ese: Essex Law School and EUCLID University owie@euclidfaculty.net

Journal of Taxation and Economic Development, 2026, vol. 25, issue 1, 31-46

Abstract: The African Continental Free Trade Area (AfCFTA) Protocol on Digital Trade creates a continental legal framework for digitally enabled commerce, but it also sharpens a central fiscal question for African states: how to tax value created in dematerialised markets without undermining market integration. Using Nigeria as a case study, this article examines the interaction between digital trade liberalisation, domestic revenue mobilisation, and emerging global tax norms. It argues that Nigeria’s 2025 tax reform package – the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025 – marks a decisive turn towards digital fiscal sovereignty through three linked moves: expansion of nexus rules beyond physical presence, redesign of value added tax (VAT) collection around platforms and non-resident suppliers, and deployment of technology-backed compliance tools, including fiscalisation and reporting obligations for virtual asset service providers. At the same time, Nigeria’s adoption of a 15 per cent minimum effective tax rule places it within the Organisation for Economic Co-operation and Development/Group of Twenty (OECD/G20) global minimum tax project. This matters because differences in domestic tax rules shape the conditions under which digital firms operate across African markets, making fiscal design an emerging determinant of continental integration. The article’s novel contribution is to show that, within the AfCFTA, taxation is no longer a peripheral domestic matter but a constitutive element of digital market design. Unless AfCFTA implementation is matched by a coordinated continental approach to internal taxes on digital supplies, digital VAT administration, platform reporting, and information exchange, the result may be regulatory fragmentation rather than integration. It concludes by proposing an AfCFTA-consistent pathway that reconciles fiscal sovereignty, non-discrimination, administrative feasibility, and sustainable development

Keywords: AfCFTA; digital trade; digital taxation; Nigeria Tax Act 2025; VAT; global minimum tax; sustainable development (search for similar items in EconPapers)
JEL-codes: F15 H25 K34 O55 (search for similar items in EconPapers)
Date: 2026
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