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From Adanna Nnamani, Abuja
For many small and medium-sized enterprises (SMEs) in Nigeria, paying taxes is no longer simply a statutory obligation. Rather, it has become a source of anxiety, uncertainty and, in some cases, distrust.
While the Federal Government is pushing reforms aimed at widening the tax base, simplifying administration and encouraging voluntary compliance, many business owners say the relationship between taxpayers and tax authorities remains weighed down by inconsistent procedures, multiple taxation, inadequate communication and a lack of trust.
These concerns were the center of discussion at a recent stakeholders’ engagement organised by the Office of the Tax Ombud in Abuja, where representatives of the private sector, fintech industry, manufacturers and tax administration examined some of the difficulties confronting taxpayers.
The engagement revealed that the problem may not necessarily be the unwillingness of businesses to pay taxes, but the manner in which the tax system is administered.
For some, the problem is multiple taxation. For others, it is poor communication. Some complain about inconsistent interpretations of tax rules, while others worry about lengthy dispute-resolution processes.
And for fintech companies, there is the additional challenge of making tax authorities understand that moving money is not the same thing as making money.
Abiola Jimohi, representative of the Fintech Association of Nigeria, explained this, stating that a customer may transfer N1 million through a fintech platform and though the transaction appears large, the fintech may earn only a tiny amount from it, while paying several charges to process the transaction.
He said: “Somebody carries out a transaction of N1 million. Do you know how much we charge for that? If you transfer N1 million through my fintech platform, I charge just N10.
“Out of that N10 transaction fee, I still have to pay for the SMS notification you receive, which costs me N2.
“I also pay the central platform, NIBSS, which enables the transaction. That costs me N3. So, after those charges, I’m left with only about N4.”
According to him, that is where the frustration begins as a company can process hundreds of millions or even billions of naira without having anything close to that amount as its actual income.
Jimohi said fintech operators sometimes find themselves having to explain this distinction to tax officials.
“But what does the taxman see? He sees a turnover of N400 billion. So, the taxman comes to me and says, ‘You have a turnover of N400 billion. Is that correct? Then I’m going to tax you based on that turnover.’ And that is where the long argument begins. It has always been a problem.
“It is a problem that comes with a human cost.
“Behind these numbers are young businesses trying to survive, founders trying to attract investors, employees depending on salaries and customers relying on digital platforms for their everyday transactions,” he stated.
Jimohi said fintech companies also raise money from investors to build their businesses, but that such investments can sometimes be misunderstood.
According to him, “We raise, say, $200,000 or $1 million. Do you know why we announce those figures, especially the foreign investment figures? We announce them to give foreign investors confidence to invest in the Nigerian ecosystem and to show that good things are coming out of here.
“But once we announce the amount we have raised, the taxman is already looking at how much we have received and may interpret it as income or turnover.”
He noted that his argument was not that fintech companies should not pay taxes. Rather, it was that the tax system should understand how their businesses actually work.
Representative, Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACIMA), Nwachukwu Okafor, a lawyer, called for simplification of tax procedures, consistency across tax jurisdictions, reduction of multiple taxation and stronger digital service delivery.
Okafor pointed to the Nigeria Revenue Service’s Revenue 360 digital platform as an initiative that could help simplify tax administration if effectively implemented. However, he said the challenge was ensuring that businesses actually knew how to use the system and that the promised improvements translated into practical benefits.
He said : “As far as NACIMA is concerned, we would like to see a simplification of the tax procedures. We would also appreciate greater consistency across tax jurisdictions, a reduction in multiple taxation and stronger digital service delivery.
“If Revenue 360 is implemented in the way it was presented, it will be beneficial to our members. At its launch, Revenue 360 was presented as a platform where taxpayers could create their accounts, provide their details and manage the tax process from beginning to end.
“So, we would like to see improved service delivery from the NRS. Our members are the ones paying these taxes, and they need a simpler and more efficient tax system.”
He also stressed the importance of consultation between government and businesses before policies are implemented.
“We would want improved taxpayer education. We want the tax authorities to publish clear guidelines and provide timely responses.
“We want a partnership with the NRS. Because if we are partnering with the NRS, we will be there when these policies are being initiated. We will be there when these ideas are being discussed.”
Okafor said the issue is not just about the amount of tax payable, but about knowing what is payable, to whom, when and under what rules, adding such predictability is critical for business planning.
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“A small business owner who cannot accurately determine his tax obligations may struggle to budget, price products, employ workers or plan expansion. And when rules change without adequate communication, the uncertainty becomes even greater’,” he added.
Okafor also cited concerns among businesses over whether provisions of the new tax law would be applied retrospectively. He said representations were made to the NRS before the Finance Minister subsequently issued guidelines clarifying that the new law should not be applied retrospectively.
He said, for businesses, such episodes reinforce the argument that better communication is as important as the tax policy itself.
Similarly, representing the Manufacturers Association of Nigeria (MAN), Mr. Adeyemi Folorunsho, called for stronger engagement between businesses and tax authorities and more efficient dispute-resolution mechanisms.
He said manufacturers had been involved in discussions around the new tax law but wanted deeper consultation during implementation.
According to Folorunsho delays and uncertainty in resolving tax disputes can have dire consequences for manufacturers, affecting investment decisions, production costs and business planning.
He therefore called for an independent and faster dispute-resolution mechanism.
“The first thing we want is stronger taxpayer engagement, ensuring that organised businesses and manufacturers are properly involved. As I said earlier, we were consulted, and our representatives were actively involved in the development of the new tax law. Notwithstanding that, there is still a need for proper consultation with our members during implementation.because there are areas where you need to engage stakeholders more deeply to understand the practical implications of what is being introduced.
“We also expect the tax authority to provide an independent channel for taxpayers to raise concerns and resolve issues.
“Another important area is strengthening mediation and early dispute resolution to reduce unnecessary and prolonged disputes.We also need to streamline the processes and reduce bureaucratic bottlenecks, while improving communication between taxpayers and the tax authority.”
Meanwhile, Tax Ombud/Chief Executive, Dr John Nwabueze, said the office was established to strengthen the relationship between taxpayers and the institutions responsible for administering public revenue.
He said Nigeria had joined a wider international movement towards specialised taxpayer advocacy, noting that the United States established an Office of the Tax Ombudsman in 1979.
According to him, Nigeria is the ninth country in the world and the third in Africa to adopt the tax ombudsman concept.
He said: “The office therefore represents an important evolution from the traditional conception of taxation as primarily an exercise of governmental authority toward a modern system based on a more balanced relationship between the State and the taxpayer.”
Nwabueze said the office was established under Part VI of the Joint Revenue Board of Nigeria (Establishment) Act, 2025, to receive, investigate and resolve complaints relating to taxes, levies, regulatory fees and charges, customs duties and excise matters.
He explained that the traditional tax dispute-resolution framework, involving objections to assessments, administrative reviews, the Tax Appeal Tribunal and courts, did not completely address administrative or procedural difficulties taxpayers face.
“For many years, Nigeria’s tax and revenue dispute-resolution framework was largely built around objections to assessments, administrative review, the Tax Appeal Tribunal and the courts.
“While these mechanisms remain important for determining substantive tax liabilities, there was a gap for taxpayers who experienced administrative or procedural difficulties in their dealings with revenue authorities.
“The comprehensive tax reforms initiated under President Bola Ahmed Tinubu sought to address broader weaknesses in the tax and revenue systems, more importantly perceived fragmentation, complexity and the burden of multiple taxes.
The chief executive said the office had launched a website, interactive contact centre and case-management portal to make it easier for taxpayers to submit complaints, obtain information and track their cases.
He also disclosed plans to establish zonal offices across the country, with at least three expected to commence operations within weeks of the engagement.
“We have established and launched key digital platforms that provide taxpayers and complainants with easier access to the office of the Tax Ombud.
“These platforms enable taxpayers to submit complaints, obtain information, track the progress of their cases and receive timely assistance.”
“Recognizing that access to taxpayer protection should not be limited by geography, the OTO is working in partnership with the state governments to establish zonal offices across the country.
He said the office had also commenced public sensitisation programmes to improve awareness of taxpayers’ rights and the mandate of the Ombud.
Nwabueze further disclosed plans to launch the Taxpayer’s Bill of Rights and Obligations, which he said would provide taxpayers with a clearer understanding of their rights and responsibilities.
“This is critical because an institution can only protect rights effectively when citizens understand those rights and know where and how to seek address.”
“The Charter will provide taxpayers with a clear understanding of their rights, responsibilities, and the standards of fairness, transparency, and accountability they should expect from tax and revenue authorities.
“We believe this will strengthen taxpayer awareness, encourage voluntary, prevent disputes and build greater trust across the tax ecosystem.
He also proposed that revenue-generating agencies designate liaison officers to work with the Office of the Tax Ombud.
The office, he said, would help facilitate timely communication, early resolution of complaints, information sharing within the law and identification of recurring administrative challenges.
Nwabueze said the ultimate objective is not to weaken tax authorities but to create checks that make the entire system work better. He argued that the government can simultaneously pursue revenue mobilisation and taxpayer protection.
