pagination not working on custom-taxonomy template

If your site is at the root of the domain (something like http://www.example.com), find the location / block inside the configuration file, and add the following line to it.

try_files $uri $uri/ /index.php?$args;

Here, Nginx checks for the existence of a file at the URL ($uri), then for a directory ($uri/). If it doesn’t find a directory or a file, it performs an internal redirect to /index.php passing the query string arguments as parameters.

It should look like this after the edits :

location / {
    index index.php index.html index.htm;
    try_files $uri $uri/ /index.php?$args;
}

If your site is in a subfolder (say /site), you’ll have to add an extra location /site/ block to your configuration file :

location /site/ {
    try_files $uri $uri/ /site/index.php?$args;
}

After you have finished making the changes in the configuration file, reload the nginx configuration by :

nginx -s reload

WordPress’ pretty permalinks should work fine now.

I found this answer here
And here are some other helpful likns-

  1. https://codex.wordpress.org/Nginx
  2. http://www.lowendguide.com/3/webservers/wordpress-permalinks-with-nginx/
  3. https://www.pmg.com/blog/a-mostly-complete-guide-to-the-wordpress-rewrite-api/