Why Nigeria’s New Tax Law Feels Like Extraction, Not Citizenship
By Hussein Adeleye
Nigeria’s new tax law is being sold as reform: modern, efficient, and necessary. On paper, it largely is. The law consolidates fragmented tax regimes, simplifies administration, broadens the tax base, reduces certain loopholes, and promises more predictable government revenue. These are legitimate objectives, and the government deserves credit for attempting a long-overdue overhaul of Nigeria’s tax architecture. Technocrats applaud it. Lenders are reassured and nod approvingly.
Yet among ordinary Nigerians, the reaction is not relief. It is quite mixed, often tilting towards resentment, and this disconnect matters. It matters because taxation isn’t just a technical exercise that looks good to technocrats and experts on policy briefs but a moral and political relationship between the government and its citizens. And in Nigeria today, that relationship is deeply strained. This tension between technical reform and public distrust has spilt loudly into Nigeria’s public sphere, where humour, anger, resignation, and outright resistance have become proxies for a deeper unease about what taxation now demands, and what governance still fails to deliver.
What Nigeria has effectively done is import the structure of a largely European-style tax system without first earning the trust that makes such systems work. This is not a question of whether taxes are good or bad. It is a question of sequencing, legitimacy, and accountability.
In many states, taxation evolves in tandem with accountability. Citizens pay, but they also see roads that last, hospitals that function, schools that educate, and public officials who face consequences for misconduct. Overtime, taxes become the price of collective life.
In Nigeria, citizens are being asked to pay more consistently, more comprehensively, and more personally without seeing a corresponding improvement in governance. It is therefore troubling that while a law that expands the scope, consistency, and intimacy of personal taxation moved swiftly, from introduction in late 2024 to passage and commencement by January 2026, critical accountability frameworks such as the Whistleblower Protection Bill have remained stalled since 2017, despite years of advocacy and evidence of the policy’s effectiveness even without statutory backing.
The implicit message, intended or not, is familiar: pay now, development will follow later. Nigerians have heard this before.
Who Benefits From the New Tax Regime?
Let us be honest about the beneficiaries of the new tax regime.
First, government revenue authorities: the newly established Nigeria Revenue Service (NRS), alongside State Internal Revenue Services and the Joint Revenue Board, along with federal and subnational treasuries. This, in itself, is not the issue. The tax net is wider, enforcement powers are clearer and stronger, and revenue flows are more predictable. From a fiscal planning and coordination perspective, this is a big win.
Second, large, well-structured corporations benefit. For companies already compliant, the new system offers clearer rules, simplified levies, and reduced uncertainty. Multinationals may pay a minimum effective tax, but they gain stability and predictability valuable assets in volatile environments.
Technocrats and international financial institutions are another group of beneficiaries. For lenders such as the IMF and World Bank, the reform signals fiscal discipline and a shift away from excessive borrowing. Nigeria’s paper credibility improves, even if daily realities for citizens does not.
Low-income earners are often cited as beneficiaries too, thanks to exemptions and thresholds. But this is only partially true. While these provisions exist, their real-world impact is limited. Inflation, indirect taxes, rising transport costs, and informal levies continue to erode purchasing power. For many, the promised relief exists more clearly in legislation than in lived experience.
The real burden of the reform falls on what might be described as the working and struggling middle: salaried workers, small business owners, freelancers, young professionals, and digital workers, basically, people visible enough to be taxed but insufficiently insulated from economic shocks. These Nigerians cannot hide income like politicians, offshore profits like multinational corporations, or easily escape consumption taxes. Their earnings are traceable, taxable, and increasingly exposed. This is not an argument against taxation itself; it is an argument for accountability, fairness, and reciprocity.
This is also what fundamentally distinguishes the current moment from Nigeria’s historical dependence on oil revenue. Oil money is abstract and distant. Personal taxation is intimate. It comes directly from salaries, rent, transactions, and daily survival. It is sweat, labour and blood and the government must believe that people are going to be more involved in how it is used, not when a public official faints after being asked to account for it.
Supporters of the reform often argue that strong taxation is necessary to build strong institutions. In theory, this is correct. In practice, Nigeria’s history complicates this claim. Mass taxation in foreign land, take for example, Europe, expanded alongside hard-fought, institutional reform, and growing accountability. It was not painless, but it was reciprocal. Citizens paid and demanded, and gradually won, services and representation.
In Nigeria, taxation is expanding in the absence of such reciprocity. Citizens are being asked to trust first, after decades marked by corruption scandals, visible political excess, prolonged economic hardship, and high-profile corruption cases that often end in delayed or anticlimactic resolutions. This reversal carries consequences. When people are taxed without seeing results, taxation stops feeling civic and starts feeling extractive. There is no binding mechanism that connects what citizens pay to what they receive. No service guarantees and No automatic consequences when funds are misused.
The imbalance is structural. The law contains no binding mechanism that links what citizens pay to specific, measurable public outcomes. There are no service guarantees tied to tax collection. Compliance is mandatory while accountability remains largely discretionary.
The cost of governance remains extraordinarily high, characterised by bloated political salaries/allowances, extensive convoys, and layers of aides whose public value is often unclear. While tax law may not be the instrument for regulating political spending, expanding revenue extraction without parallel restraint undermines basic notions of fairness. When citizens are asked to give more while political excess remains unaddressed, taxation feels punitive rather than participatory.
There is also a psychological dimension policymakers often overlook. Oil revenue feels distant. Personal taxation is intimate. When oil money is stolen, people are angry; but detached. When salary, rent, and daily transactions are taxed and mismanaged, it feels like personal theft. This sentiment is not confined to any single class; civil servants, security personnel, and political aides, many of whom work for politicians and public officials, also fall within the tax net, are not immune to its effects.
Before deepening personal taxation, trust should have been deliberately built. This does not require perfection, but it does require visible effort: reducing the cost of governance, ensuring swift and credible corruption convictions, passing and implementing long-delayed accountability frameworks such as the Whistleblower Protection Bill, strengthening social infrastructure, publishing accessible and real-time spending data, and enabling citizens to track how their money is used at the community level. Without some of these foundations, taxation feels less like a civic duty and more like coercion.
This bears repeating: This is not an anti-tax argument. It is a pro-accountability one.
If the state taxes labour, it must respect dignity. If it collects sweat, it must show results. Taxation without development is not reform; it is extraction, it is exploitation.
The new tax law is not inherently unjust. But in Nigeria’s present political and institutional context, it is premature. Until citizens consistently see functional roads, hospitals, power, schools, and justice, taxation will continue to feel like legalised extraction by an unaccountable elite. No amount of technical elegance can compensate for that deficit.
Hussein Adeleye is the Communications Officer of the Africa Network for Environment and Economic Justice (ANEEJ) and writes from Graz, Austria.