Taxing the Digital Workforce: Rethinking the Significant Economic Presence Rule Under Nigeria's Tax Act 2025

The enactment of the Nigeria Tax Act (NTA) 2025 represents a significant restructuring of the nation’s fiscal framework, aimed at capturing value within the borderless digital economy. This study provides a legal analysis of the updated "Significant Economic Presence" (SEP) rule under Section 17 of the Act, which shifts the taxable nexus from traditional physical presence (Permanent Establishment) to economic participation. By expanding the SEP framework, the NTA 2025 formalises the "digital shadow" of the workforce, explicitly including remote freelancers, digital consultants, and content creators within the tax net while mandating residency-based taxation on worldwide income. Additionally, the Act classifies profits from digital asset transactions, including cryptocurrencies and non-fungible tokens (NFTs), as taxable income. The analysis also examines the institutional transition from the Federal Inland Revenue Service to the Nigeria Revenue Service (NRS), emphasising the deployment of automated technologies for real-time reporting and collection. Despite these advancements, persistent challenges remain, including infrastructure deficits, enforcement complexities in peer-to-peer transactions, and the need to align with global standards such as the OECD’s Two-Pillar Solution. Ultimately, the study concludes that although the NTA 2025 modernises the fiscal social contract, its effectiveness in optimising revenue depends on institutional capacity and clear regulatory guidance.