ARTIFICIAL INTELLIGENCE AND TAX ADMINISTRATION IN NIGERIA: OPPORTUNITIES, CHALLENGES AND IMPLICATIONS FOR TAX COMPLIANCE

Abstract

The integration of Artificial Intelligence (AI) in tax administration has revolutionized tax collection, compliance enforcement, and taxpayer services. In Nigeria, the Federal Inland Revenue Service (FIRS) is exploring AI's potential to enhance tax administration, improve compliance, and increase revenue generation. This paper examines AI's transformative potential in Nigeria's tax administration, contributing to Sustainable Development Goal (SDG) 16 by reducing illicit financial flows and strengthening domestic resource mobilization. Using a doctrinal approach, this study analyzes AI's opportunities, challenges, and implications, highlighting benefits such as improved tax compliance, taxpayer experience, and revenue generation. The study reveals that AI can enhance tax compliance through personalized services, improved audit processes, and tax evasion detection. However, concerns about taxpayer rights, transparency, and accountability in AI-driven tax administration are noted. The paper recommends a comprehensive AI adoption strategy, infrastructure investment, and capacity building to ensure transparent, accountable, and fair tax administration