The rapid growth of the digital economy has presented significant challenges for tax administrations worldwide, particularly in developing economies like Nigeria. This study examines the complexities of taxing digital platform firms operating in Nigeria, exploring the legal, administrative, and economic dimensions of digital taxation. Through a comprehensive review of existing literature and analysis of Nigeria's current tax framework, this research identifies critical gaps in the taxation of digital services and proposes practical solutions. The findings reveal that Nigeria faces substantial revenue losses due to inadequate digital tax policies, enforcement challenges, and the absence of comprehensive regulations targeting platform firms. This study contributes to the growing body of knowledge on digital taxation in emerging markets and provides actionable recommendations for policymakers, tax authorities, and stakeholders in Nigeria's digital economy. The research highlights the need for legislative reforms, international cooperation, and capacity building to effectively capture tax revenues from digital transactions while fostering an enabling environment for technological innovation.