Digital Taxation and Sustainable Development Goals in a Developing Economy

This study investigates the impact of digital taxation on Nigeria’s performance against the United Nations Sustainable Development Goals (SDGs), using the annual composite SDG Index Score as the dependent variable and digitally administered Company Income Tax (CIT) and Value-Added Tax (VAT) revenues as the primary independent variables. Employing an ex-post facto research design, we analyse eight years of secondary data (2017–2024) sourced from the Federal Inland Revenue Service and the Sustainable Development Report series, with real GDP growth and inflation rate included as control variables. Descriptive statistics reveal moderate variability and approximate normality across all series. Correlation analysis indicates powerful positive associations between SDG Score and both CIT (r = 0.976, p < 0.01) and VAT (r = 0.966, p < 0.01) revenues. The multiple regression model explains 98.4% of the variation in SDG performance (R2 = 0.984, F(4,5) = 78.88, p < 0.001). However, multicollinearity between CIT and VAT prevents clear attribution of unique effects: CIT shows a positive coefficient (B = 0.004, p = 0.117) while VAT’s effect is indistinguishable (B ≈ 0, p = 0.992). GDP growth and inflation are not significant predictors once digital tax revenues are accounted for. These findings underscore the critical role of digitally enabled revenue mobilisation in financing sustainable development. We recommend (1) enhancing tax-administration infrastructure to disaggregate and track digital CIT and VAT streams separately, and (2) instituting transparent budgetary earmarks that channel incremental digital tax revenues directly into SDG-related public investments.