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Digital Tax Infrastructure (DPI) and Tax Administration in Nigeria: The Current State of the Play

10th October 2025
A man walks past a bright green roadside shop in Kenya with Safaricom and M-Pesa signs, illustrating how digital payments support Nigeria digital public infrastructure for taxation across Africa.

Background

Nigeria has been on a journey to digitalise its tax administration for more than a decade. The introduction of Integrated Tax Administration System (ITAS) in 2013 marked a significant milestone in Nigeria’s digitalised tax administration journey. Research has shown that taxpayers are generally open to using digital systems, but improvements are still needed, particularly on the government side, especially at subnational levels.

The DPI for Tax Administration in Nigeria

DPI has been built based on four major components including digital IDs, merchant payments, data exchange as well as inclusivity, equity and rights implications of DPIs. Evaluating Nigeria’s DPI journey within the context of tax administration is essential. This involves assessing how far the country has advanced across each of these components:

  • Digital ID Systems: Digital IDs are central to Digital Public Infrastructure (DPI). They enable secure and verifiable identification, helping people access public and private services, receive targeted benefits, and carry out trusted digital transactions.

    In Nigeria, multiple ID systems exist in tax administration, including the National Identification Number (NIN), Tax Identification Number (TIN), and Bank Verification Number (BVN). Some states also issue their own taxpayer IDs, creating duplication and complexity. The new DPI Technical Standard addresses this by establishing the NIN as the primary identifier.
    For tax administration, adopting the NIN will be essential for simplifying processes and ensuring consistent DPI implementation. It gives a supremacy to the National Identity Number (NIN) as the primary identifier for DPI implementation. Thus, tax administration must embrace NIN as primary identifier which eventually simplified the implementation of DPI for tax administration.

  • Merchant Payment systems: Merchant payments form an essential part of Digital Public Infrastructure (DPI). They make digital transactions between consumers, businesses, and tax administrations easier, safer, and more affordable. This promotes financial inclusion, strengthens the digital economy, and expands the use of digital payments across all sectors.
    Nigeria already has a strong merchant payment ecosystem to support DPI implementation. These include the Nigeria Inter-Bank Settlement System (NIBSS), a public utility that underpins the national payments infrastructure; the Shared Agent Network Expansion Facilities (SANEF), a public initiative that expands access to financial services through agent networks; and private providers such as Paystack and Flutterwave, which offer digital payment gateways widely used by businesses and individuals. Together, these platforms enable seamless, secure, and low-cost digital transactions between taxpayers and tax administrations.
  • Data exchange:Data exchange is a key part of Digital Public Infrastructure (DPI). It allows secure and consent-based sharing of information between government and private systems. This improves service delivery, reduces duplication, and ensures that platforms like identity, payment, and benefits systems can work together while protecting user privacy.
    In Nigeria, merchant payment providers are ready to share data with tax administrations. However, such should be underpinned by a clear data governance framework, which is currently non-existent, although there exist Nigeria Data Protection Regulation 2019 (NDPR) However, it does not adequately address the data sharing and exchange between electronic merchant payment systems and tax administration. Strong data governance frameworks are needed to define how and what data can be shared, particularly for tax administration.
  • Inclusivity, equity and rights implications: Inclusivity, equity, and rights in DPI ensure that digital systems are accessible to all, treat users fairly, and protect their data and privacy. In Nigeria’s tax administration, multiple systems, including the Electronic Tax System, Central Billing Systems, and State Identity Management systems, create challenges for DPI implementation. The key question is which system should anchor the DPI Data Exchange Architecture at subnational levels while ensuring inclusivity and data privacy. Each subnational government will need to assess its systems and choose the most effective option.

Progress and Way Forward

Recently, Nigeria Governors Forum (NGF) organised DPI Peer Learning Event held from 30th June to 1st July 2025 bringing together various stakeholders within the DPI and tax administration space. It launched DPI Readiness and Intelligent Revenue Authorities (IRA) Reports highlighting the maturity levels of subnational tax administrations in Nigeria. The reports suggest that ICTD’s work and that of other stakeholders in Nigeria is showing results. There have been significant improvements especially at subnational levels compared to last few years when ICTD funded studies were conducted.

The reports showed more automation in tax administrations and centralisation of databases that were once in silos. Integration between identity systems, especially the National Identity Number (NIN), and revenue systems has also improved. Updated electronic tax systems (e-Tax) now make compliance monitoring and real-time reporting easier.

While only two states reached high digital maturity, most are at a moderate stage of digital transformation. Further investment in technical skills, digital tools, and strategy is still needed to fully leverage intelligent systems.

The event marks an important milestone in DPI implementation in Nigeria, particularly at the subnational level. However, there is still room for improvement to strengthen DPI implementation across subnational tax administrations, as outlined below:

  1. Diagnostic assessments are needed for Central Billing Systems, the Electronic Tax System, and State Identity Management systems. The goal is to identify which of these is best suited as a potential DPI for subnational governments in Nigeria, following the DPI Development Cycle.
  2. There is a need to evaluate the extent to which the draft DPI Technical Standard and National Digital Public Infrastructure (DPI) Framework address issues relating to DPI for tax administration.
  3. There is a need deep dive privacy concerns issues relating to data sharing and exchange between digital merchant payment services providers and subnational tax administrations.
  4. A national policy dialogue is needed to bring together stakeholders in Nigeria’s DPI space, including government agencies, payment service providers, research centres, and civil society. Such an event would help share research, highlight policy gaps, raise awareness, and reduce perception gaps around DPI for tax administration.

Abdussalam Mas'ud

Dr. Abdussalam Mas'ud is a former Associate Professor of Taxation at Federal University Dutse, Nigeria, and has been an ICTD research grantee since 2017. He has published extensively on tax and fiscal systems and was a recipient of the Malaysia Institute of Accountants (MIA) Article of Merit Award in 2016. Dr. Mas'ud left academia in early 2023 and now works in industry.
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