Working Paper 243
This paper explores Nigeria’s nuanced approach to the adoption and implementation of international tax standards (ITS), incorporating insights from key stakeholders. The study is part of ICTD’s research project ‘Comparative Perspectives on International Tax from the Global South’. Nigeria selectively evaluates, adopts, modifies, or rejects global tax norms to align with domestic economic realities and policy objectives. It has made substantial progress in ITS alignment, demonstrating commitment to international norms, while implementation is shaped by capacity constraints, political economy factors, and fiscal sovereignty concerns.
Nigeria’s most visible alignment is in transfer pricing. Its 2018 Transfer Pricing Regulations align with OECD and UN guidelines, incorporating key principles to combat tax avoidance, and introducing Nigeria-specific nuances and compliance requirements. The new Transfer Pricing Unit has increased audits, assessments, and revenue mobilisation, although constrained by technical skills gaps and institutional limitations.
Dispute resolution and transparency frameworks are functional. The Tax Appeal Tribunal provides a specialised forum for tax disputes, and Nigeria’s Mutual Agreement Procedure, though underutilised, broadly aligns with OECD standards. Alignment with Exchange of Information on Request is strong, supported by a solid legal and institutional framework, but not always consistent, particularly in politically sensitive cases. Automatic Exchange of Information is only partially effective due to legislative gaps, high costs, and limited technical capacity.
Significant beneficial ownership and digital taxation reforms are largely consistent with ITS, demonstrating proactive engagement with emerging global norms, and generating new revenue streams. Nigeria’s tax treaty network is structurally aligned with international standards, but limited.
Overall, Nigeria is a largely compliant but selective integrator of ITS. It has built substantial legal and institutional frameworks and achieved measurable gains, yet capacity constraints, political considerations, and concerns about fiscal sovereignty and revenue generation shape how ITS operate in practice.
