The implementation of policy reforms under the recently enacted Nigerian Tax Act has negatively impacted the socio-economic conditions of Nigerians, a coalition of Nigerian and international civil society and trade unions have said.
At the conclusion of the Policy Dialogue on Funding Quality Public Services to Build Trust in Nigeria’s Tax Laws, the coalition noted that virtually all aspects of the people’s life have worsened under new tax regime in the country.
The coalition is composed of Global Initiative for Economic, Social and Cultural Rights (GI-ESCR); Tax Justice and Governance Platform; Connected Development; Gatefield, and PSI- National Co-ordinating Committee Nigeria.
Apart from the removal of fuel subsidy, which has impacted the cost of supplying petroleum products, particularly petrol, and the rising cost of transportation and other economic activities dependent on fuel, the coalition said the indirect taxation such as VAT, excise and customs duties as well as others taxes currently in use under the new tax regime have transferred extra burdens to consumers of goods and services.
“Apart the VAT component in the fuel pricing template, which has increased the cost of transportation nationwide, the electricity tariffs and other utilities have all increased, making the cost of living more unbearable, even where the promise of improved quality of life with enhanced revenue from tax collection is yet to manifest,” the coalition observed.
“Many Nigerians pay taxes and then pay privately for healthcare, education, water, energy, transport and other essential services,” it added.
Nigeria at a consequential reform moment
Nigeria, the coalition noted, is at a consequential reform moment following the introduction of four tax reform laws, which took effect in January 2026, seeking to improve revenue mobilisation, streamline tax administration and strengthen the overall business environment.
The reforms, the group highlighted, included measures to move the tax system in a more progressive direction,including ensuring stronger corporate income-tax principles, the significant Economic presence concept for taxing foreign companies without a physical presence in Nigeria, and the need to increase the effective tax rate for large multinational enterprises based on the minimum 15% rate.
While the reforms could be more ambitious in addressing inequality and ensuring that those with the greatest ability to pay contributed their fair share, the group said these provisions point in the direction of the implementation.
The implementation, they argued, would depend on how much additional revenue would be generated; how much of this revenue would be drawn from corporations; the extent to which the laws would be used to limit the use of unfair and harmful tax exemptions and incentives, and whether public institutions have the capacity and political support to enforce the new rules.
Although passing the tax laws was an important step, the coalition pointed out that realising their potential would require
effective enforcement, coordination across federal, state and local governments, with clear, accessible and regularly updated public information.
Transparency, the group said, would enable citizens and civil society to monitor implementation, identify gaps and support public institutions in achieving the reforms’ objectives, adding that revenue mobilisation must also be connected to people’s lives.
Citing World Health Organization (WHO) Global Health Expenditure database, the group said out-of-pocket payments accounted for 76.13% of total health expenditure in 2023, while education’s share of government
expenditure fell from 9.3% in 2015 to only 3% in 2024 according to a report by
Global Economy.
Unfulfilled expectations
With the tax reform, the coalition said the expectation of the average Nigerian was that they would strengthen the social
contract when revenue is raised fairly and translated into the provision and
delivery of quality, affordable, and reliable public services for all.
“Nigerians expected something even broader, tax revenue that effectively powers an economy that creates jobs, reduces poverty, improves productivity, strengthens businesses, expands opportunities for young people, empowers women, guarantees food security and restores confidence in the future, the coalition said.
Nigeria’s choices, the coalition insisted, matter beyond its borders, adding that with the UN Population Fund putting the country’s population at approximately 237.5 million, Nigeria is reputed to be Africa’s most populous country and a major political and economic actor in West Africa and the African Continent.
“How Nigeria implements these reforms
can offer important lessons for countries across Africa and the wider Global South that are seeking to expand domestic revenue while advancing equity, human rights and dignity, and sustainable development.
Consequently, the coalition identified its collective demands to include a transparent, accountable and effective implementation of the reforms that would make tax data public, by publishing clear and regularly updated information on projected revenue, actual quarterly collections, compliance rates by
sector and taxpayer category, and the value and impact of tax incentives
and exemptions.
Also, the coalition said the implementation should include strategies to make multinational corporations operating in Nigeria publicly disclose their financial and tax data to curb global tax avoidance, while an effective and independent participation and accountability
system should be establishee.
While commending the establishment of the Tax Ombuds Office to handle the resolution of disputes relating to tax issues, the coalition said the agency should be adequately resourced,technically credible and open to meaningful participation by citizens and civil society.
“The Tax Ombud’s Office should publicise its methodology for receiving and addressing complaints, holding meetings and consultations with relevant stakeholders, determining problematic patterns and addressing systemic issues,” it said.
While the Ministry of Finance might consider establishing a permanent advisory council on tax policy, integrated by tax experts, civil society, business representatives and government agencies, the corporations operating in the digital economy must be made to pay their fair share of corporate income tax.
Besides, publishing a practical plan for
implementing and enforcing the taxation of digital services, in line with relevant international standards, the group said the revenue collected from digital economy operators should regularly be disclosed.
Stressing the need to strengthen corporate taxation of digital economy to allow corporate tax to be borne only by the corporation and its shareholders, multinational enterprises pay the 15% effective tax rate, while prioritising efforts to progressively increase it to 25%.
Other demands include strengthening action against transfer mispricing and publish information on tax-information exchange arrangements, enforcement capacity and the revenue collected annually from multinational enterprises; increase and better funding of public services, and protection of social spending from being crowded out by debt servicing obligations.
Also, a clear plan showing how additional tax revenue would increase and sustain investment in education, health, energy and water must be published; adopt a time-bound plan to meet international education spending benchmarks, and allocation of at least 4–6% of GDP and 15–20% of government expenditure to education, showing how additional tax revenue would support basic education, girls and marginalised communities.
In addition, the coalition demanded the adoption of a time-bound plan to meet international health spending benchmarks and reduce out-of-pocket payments by allocating at least 5–6% of GDP and 15% of government expenditure to health, expand coverage
through the National Health Insurance Authority and the Basic Healthcare Provision Fund, as well as publishing quarterly progress reports.
The demands also included the need to increase investment in energy and water to ensure that these services reach communities at an affordable rate, high quality and also reliable, in addition to setting clear targets and timelines, improve the disbursement and effective use of allocated resources, and regularly publish reports on access to reliable electricity and safe water.
The group emphasized the need to establish a transparent, citizen-facing framework for public spending, including accessible information on how revenue is collected and
spent, independent audits with effective enforcement powers, consequences for misappropriation and underperformance, and structured opportunities for citizens and civil society to monitor budgets and service delivery.
The coalition used the occasion to launch the #PayTax4Wetin, a national campaign supporting the fair, transparent and effective implementation of Nigeria’s new tax framework, to call for the additional public revenue that it generates to be used to improve people’s lives.
The campaign, which poses a simple and constructive question on what the Nigeria’s new tax system would deliver to its peoples calls for government commitment to effectively taxing multinational corporations and the high net-worth individuals, while ensuring that revenue collected delivers concrete results for the people, including better-funded, high quality, and reliable education and healthcare, clean water and reliable energy, and effective public administration.
The campaign also calls for the need to ensure that schools and hospitals were built or renovated, more public service workers like teachers, health workers, and public administrators hired, trained, and properly remunerated to guarantee improved public service delivery for all Nigerians.
