The signing of the four tax reform bills by President Bola Tinubu marks a significant shift in Nigeria’s fiscal policy landscape, but does it ease growing public frustration around the visible disconnect between taxation and public service delivery?
Development Diaries reports that the president on Thursday signed the four tax reform bills recently passed by the National Assembly, retaining Value Added Tax (VAT) at 7.5 percent and the Corporate Income Tax (CIT) at 30 percent without any increment.
By retaining the VAT at 7.5 percent and the CIT at 30 percent, the government has chosen not to increase tax rates but instead to focus on overhauling the structure and administration of tax collection.
This move, which includes the creation of a more autonomous Nigeria Revenue Service (NRS) and a Joint Revenue Board to harmonise tax administration across all tiers of government, is intended to boost efficiency, reduce tax leakages, and improve Nigeria’s ease of doing business ranking.
However, beyond institutional changes, the key concern remains whether Nigerians, especially those in the informal economy and low-income households, will experience tangible improvements in their daily lives as a result of this reform.
As it stands, Nigeria’s tax-to-GDP ratio is one of the lowest in Africa, sitting at approximately 10.86 percent as of 2023, and over 13.5 percent at the end of 2024, compared to the African average of 16.5 percent.
This has often been used to justify broadening the tax net. Yet, Nigerians frequently express frustration with what they perceive as a system that demands taxes without corresponding public benefits.
If the aim of these reforms is truly to usher in a ‘new lease of life’, as the president stated, then citizens must begin to see evidence of improved service delivery in their immediate environments, otherwise, these structural changes will be seen as mere bureaucratic exercises.
Moreover, while the NRS is expected to introduce transparency and performance-driven mechanisms, implementation remains a significant hurdle.
Trust in public institutions is low, and concerns about accountability are high.
For instance, reports from BudgIT and other civic organisations consistently highlight how funds, including those from tax revenues, are either mismanaged or not effectively allocated.
Citizens will only support and comply with tax obligations if they see a clear return on their contributions.
The six-month window before implementation begins in January 2026 is a crucial period. According to NRS chairman, Zacch Adedeji, this time is meant for putting modalities in place and sensitising Nigerians. But awareness alone will not change perception.
The government must go beyond sensitisation campaigns and provide concrete timelines and milestones on how tax revenues will translate into better public goods.
Ultimately, the success of this fiscal reform will depend not just on policy design but on public perception and practical outcomes.
With inflation currently at 22.9 percent and food inflation at 21.14 percent, many Nigerians are struggling to meet basic needs.
If these reforms only streamline tax collection without addressing corruption, wasteful spending, and the urgent need for economic relief, the promises of prosperity and business opportunities made by the president will ring hollow.
For the average Nigerian, the true test of these reforms will be whether they lead to more reliable electricity, safer roads, better schools, and healthcare that doesn’t demand out-of-pocket payments.
Development Diaries calls on President Tinubu, the Chairman of the NRS, Adedeji, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, to ensure that taxation no longer feels like an annual subscription to suffering but becomes a shared tool for national development that benefits all.
Photo source: Taiwo Oyedele
