Digital Tax Invoice and Tax Gap Rate: Evidence From Listed Consumer Goods Manufacturing Firms in Nigeria

Tax compliance represent the degree of responsiveness to tax obligations, where application of technology in its administration processes determines the compliance level and amount of revenue generated by relevant tax authorities. Despite its relevance, ineffective tax assessment and syndromic perceptions of tax administrators, tax evasion and avoidance, underreporting of income, tax havens and procedural aggressive tax planning serve as a plague to efficient tax administration and compliance. The study therefore, examined the effect of digital tax invoice on tax gap rate of listed consumer goods manufacturing firms in Nigeria. The study employed ex-post facto research design through secondary data, fourteen (14) out of twenty three (23) firms was purposively selected based on the year of incorporation, availability and accessibility to publish financial report of the listed consumer goods manufacturing firms. Panel Regression Analysis was used to examine the effect of digital tax invoice on tax gap rate of listed consumer goods manufacturing firms in Nigeria Findings from the result of panel regression showed that e-payment (−0.103431) and digital tax invoicing (−0.001697) have statistically significant negative effects on tax gap rate, E-filing (−0.085160), IT infrastructure (−0.001014) showed negative relationships but not strongly significant at 5% level, IT access (−0.000198) has no significant effect. The study established that digital tax invoice has significant effect on tax gap rate of listed consumer goods manufacturing firms in Nigeria.. It is recommended that, The Federal Inland Revenue Service (FIRS) should continue to strengthen and expand the implementation of digital tax invoicing among eligible corporate taxpayers. The system should be designed to facilitate seamless electronic generation, validation and transmission of invoices to improve the visibility of taxable transactions and minimise opportunities for under-reporting.