The Effect of E-Payment on Total Revenue Generation: Evidence from Federal Inland Revenue Service of Nigeria

Abstract

This study investigates the effect of electronic payment (e-payment) systems on total revenue generation by the Federal Inland Revenue Service (FIRS) in Nigeria. Against the backdrop of ongoing digitalization reforms in public finance, the research addresses gaps in the literature regarding the empirical impact of e-payment adoption on government revenue. Utilizing quarterly data from 2011 to 2022, the study employs descriptive statistics, paired sample t-tests, and regression analysis to compare revenue outcomes before and after the implementation of e-payment platforms. The findings reveal a significant increase in total revenue following the adoption of e-payment systems, with the mean revenue rising by 37.7% in the post-e-payment era. The paired sample t-test confirms the statistical significance of this increase, while regression results indicate that e-payment adoption is a strong and positive predictor of revenue growth, even after controlling for company income tax and non-oil revenue. The study concludes that digitalization, particularly through e-payment systems, has substantially enhanced revenue mobilization, transparency, and compliance in Nigeria’s tax administration. However, challenges such as infrastructural deficits, digital literacy, and taxpayer awareness persist. The paper recommends sustained investment in digital infrastructure, targeted taxpayer education, and robust stakeholder collaboration to maximize the benefits of e-payment systems and support fiscal sustainability in Nigeria.