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Since the simultaneous implementation of the new tax laws on January 1, 2026, the exercise has been trailed with lots of criticisms by Nigerians, experts, and politicians. Two major planks of argument centred on taxing the rich and taxing the poor. While the federal government is saying that the new tax laws will make the rich pay more and exempt the poor from paying any tax, the opposition politicians are arguing that the government is using the new tax regime to tax the poor. They have also argued that since over 133 million Nigerians are said to be poor multidimensionally, the new tax system is akin to taxing poverty.
The new tax laws include the Nigeria Tax Act 2025, the Nigeria Tax Administration Act 2025, the Nigeria Revenue Service Establishment Act 2025 and the Joint Revenue Board Establishment Act 2025. In enacting the new tax laws, government wants to expand the country’s tax base and earn more revenue to develop infrastructure and other needs of the government. Most efficient governments depend so much on taxes to serve the welfare and security needs of the citizens, the major reason government exists in the first place.
Government is implementing the new tax regime because of dwindling revenue from oil, our major revenue spinner since the discovery of oil in commercial quantities. Hitherto, agriculture used to be our major revenue earner and largest employer of labour. Even though agriculture remains the largest employer of labour, its revenue-earning capacity has been reduced because of years of neglect and emphasis on oil revenue. The sector is yet to be fully developed and mechanized. The new plan to revive agriculture is informed by the fact that oil is a diminishing resource that will not last forever. But agriculture is self-sustaining and can last for eternity.
After the necessary digression, let’s get back to the main theme of today’s article, which is on the new tax laws with its unending criticisms. The more the tax man explains the new tax laws, the more the criticisms keep coming. Despite having different versions of the new tax laws, and calls for a review, the government went ahead with the implementation as scheduled. Tax matters are always problematic in colonial and post-colonial nations. Because it was levied by colonial masters, people resent taxation and see it as alien and unnecessary exploitation.
The attempt by the colonial masters to impose tax on women in Igbo land led to Aba Women’s riot of 1929. Attempts elsewhere in Nigeria to tax the people led to protests and resistance. With independence, some citizens view the government with suspicion and regard it as an alien institution. The relationship between the people and the government was reduced to “we” and “them.” This dichotomy still exists today. That is why development is still eluding Nigerians. There is loss of confidence in the government and what it does. The citizens no longer trust the government because of failed promises and unfulfilled goals and dreams.
In Nigeria, nobody loves the tax man. The tax man is seen as an enemy. Apart from civil servants and those who work in private firms, many Nigerians avoid tax and the tax man. Private business owners maneuver the tax system and pay less tax. Some even use unethical tactics to avoid taxation. These are some of the issues facing the new tax laws.
The other day, the President of Nigeria Labour Congress (NLC), Comrade Joe Ajaero, picked holes with the new tax laws and said that they could exacerbate poverty and deepen hardship among Nigerian workers and the poor if they are not urgently reviewed. Ajaero raised the concern at the book launch and 85th birthday celebration of former NLC President, Hassan Sunmonu in Abuja. The NLC leader alleged that the tax laws were formulated without the input of Nigerian workers and the masses. He maintained that the process was exclusionary and harmful to democratic governance.
“Tax laws that impose heavy burdens on workers and the poor are not progressive. Tax that taxes the national minimum wage is not fair. Tax that taxes the masses who are living in excruciating poverty is regressive,” Ajaero stated. Some days ago, the former Labour Party presidential candidate in the 2023 election, Peter Obi, and Archbishop Ignatius Kaigama of Nigeria’s Catholic Archdiocese of Abuja, expressed fresh worries over the implementation of the new tax regime. Obi said that the tax laws had been fundamentally altered. He affirmed that the global accounting firm, KPMG, had indentified 31critical problem areas ranging from drafting errors to policy contradictions and administrative gaps.
Similarly, Archbishop Kaigama queried the rationale of implementing the new tax laws when many Nigerians are passing through difficulties. Besides, there are fears in some quarters that as from January 19, 2026, Nigerians will pay a 7.5% Value Added Tax (VAT) on some banking services. These include mobile bank transfers and Unstructured Supplementary Service Data (USSD) transactions. Already Nigerians are grappling with multiple bank charges. Some of them are suspicious and questionable.
Despite these reservations, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, admitted that tax reforms were particularly difficult to implement because they touched vested interests, compounded by low trust in government, weak tax culture and limited visibility of fiscal exchange. Taiwo, who spoke in Abuja at a governance colloquium organized to mark the 50th birthday of the Special Adviser to the President on Policy and Coordination and Head of the Central Delivery Coordination Unit (CDCU), Hajiya Hadiza Bala Usman, raised the alarm that he had received death threats over the implementation of the new tax reforms. According to him, “reforms are hard, and tax reforms are even harder. You need courage. I receive threats simply for trying to fix a broken system,” stressing that Nigeria’s tax system remains abysmally low compared to peer countries, thereby making reforms inevitable.
Our tax system is compounded by poor governance and corruption in the country. As a result of these, many citizens don’t really see the need to pay tax. They don’t want to pay for the greed of our politicians and their cronies. Nigerians are willing to pay tax if the country is working. While urging the government and the tax man to listen to the concerns of many Nigerians over the new tax regime and address them, there is urgent need to ensure good governance at all levels. Nigeria is crawling because our leaders have refused to do the right things to fix the country and make it work.
Nigerians are migrating to the US, UK and Canada simply because the country is not working and does not offer hope to the youths. If Nigeria is working, Nigerians will be willing to pay their taxes. The poor should receive tax exemption while the rich pay more. Luxury goods must be taxed heavily.
