New Tax Law: Rebuilding Nigeria’s Tax Base amid Public Exhaustion
Editor’s note: In this piece, Lekan Olayiwola looks at Nigeria’s 2026 tax reforms and why many Nigerians feel uneasy. The policy analyst explains how reform fatigue, unclear laws, and pressure on small businesses make ordinary citizens cautious about paying their dues.
Nigeria entered 2026 with a tax story unlike any it has faced in decades. From social media speculation to radio debates, conversations about the new tax laws have been urgent and, at times, anxious. Citizens worried whether their hard-earned money might be taken unexpectedly, while entrepreneurs fretted over new obligations. Yet, a careful reading of the laws shows that most Nigerians, particularly low-income earners, face exemptions and net relief.
Source: Twitter
So why does anxiety persist? The answer lies not only in the specifics of rates or compliance forms, but in a deeper, collective condition: reform fatigue. After decades of policy shifts, inconsistent enforcement, and unfulfilled promises, Nigerians approach each new initiative with a mix of hope and suspicion. To understand the moment, we must look beyond the headlines and explore the political, economic, and social dynamics that matter most.
When the state depends on taxes, governance must change
It is noteworthy that the new tax regime is Nigeria’s gradual movement away from oil rents and borrowing toward taxation as a core state resource. Rather than a technical adjustment, it is a fundamental transformation of the social contract. When governments rely on oil, fiscal distance allows them to remain unaccountable to citizens. When governments rely on taxes, citizens expect tangible returns, including better roads, functional hospitals, quality schools, and reliable public services. The legitimacy of the state is now measured not by promises, but by visible outcomes.
Yet reform fatigue means many citizens approach these promises with caution. They remember policies that were announced with fanfare but never fully implemented. The challenge is not just collecting revenue; it is demonstrating that the state is worthy of compliance. A tax state built on clarity, consistency, and service can transform fear into trust. Without these elements, compliance risks are hesitant, inconsistent, or resistant.
Legal uncertainty and the burden of doubt
A crucial issue is the discrepancy between the National Assembly’s passed version of the tax law and the gazetted text now in force. While this has been mentioned in passing, few analyses have explored the consequences for citizens and businesses. Law is not abstract; it guides behaviour. When ambiguity exists, people feel exposed rather than protected.
Businesses hesitate to invest, and individuals approach compliance with anxiety rather than confidence. Litigation risks rise, enforcement slows, and well-resourced actors may exploit uncertainty while ordinary citizens are penalised inadvertently. A dignity-affirming tax system must ensure absolute textual clarity, consistent enforcement, and public verification so that all Nigerians can navigate the system with confidence.
Federal harmonisation and local government pressures
The reforms promise to simplify taxes and reduce multiple levies. Yet Nigeria’s federal system adds complexity. Federal harmonisation can inadvertently squeeze states and local governments, whose budgets and administrative capacities are already fragile.
When local revenues decline, subnational authorities may resort to informal fees, additional levies, or bureaucratic obstacles to fill gaps. For ordinary citizens, these “side effects” often cause more fear than the federal reforms themselves. Harmonisation is valuable, but without careful coordination, simplification at the centre can translate into complexity on the ground.
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Poverty, informality, and invisible exclusion
Low-income earners are mostly exempt under the new regime, yet Nigeria’s economy remains largely informal. Millions earn irregular incomes through trade, agriculture, and small-scale services. While these workers may owe no tax, administrative requirements such as Unique Taxpayer Identification Number (UTIN) registration, filings, and declarations can still create anxiety.
This anxiety is often expressed with humour and caution on social media. One student, for example, posted a receipt from their bank account, circling the balance and writing: “Na my school fees ooh. FG no touch am.” This simple, relatable act captures the mix of fear, vigilance, and resilience many Nigerians feel as they navigate a system they are told to trust but do not yet fully understand.
Here lies a subtle risk: fear arises not from payment, but from navigating unfamiliar systems. Reform fatigue magnifies this, as citizens recall previous initiatives that promised inclusion but delivered exclusion. To be humane, a tax state must distinguish contribution from compliance, offering gradual, supportive, and educational pathways for informal workers and microbusinesses.
Small and medium enterprises: Growth under scrutiny
SMEs are vital to Nigeria’s economic recovery. They have been reassured of exemptions and thresholds, yet growth can paradoxically trigger fear over new reporting obligations, digital infrastructure requirements, and professional fees that may accompany increased visibility.
A tax system that punishes growth inadvertently discourages formalisation. Humane reform means phased obligations, clear guidance, and support for compliance, ensuring that entrepreneurial success is encouraged, not penalised. This is essential for SMEs to participate fully in Nigeria’s new economic order.
Tax reform amid electoral cycles
The timing of these reforms is politically significant. As Nigeria approaches the 2027 electoral cycle, perceptions of fairness, trust, and service delivery are heightened. Tax policy is therefore not merely fiscal; it is political, shaping public sentiment well before votes are cast.
Reform fatigue amplifies suspicion as citizens wonder if the policy is genuine or politically motivated. The antidote is transparency, empathy, and consistent administration. When citizens perceive taxation as a tool for collective benefit rather than partisan advantage, compliance grows, and trust is reinforced.
Fatigue is a signal, not a barrier
The anxiety surrounding Nigeria’s new tax economy is understandable. Reform fatigue tells us that citizens are alert, invested, and sensitive to fairness. It is a signal, not an enemy. On balance, the reforms are reassuring that most Nigerians will pay no additional tax, exemptions are explicit, and rates have been clarified.
Yet reassurance alone will not build trust. Trust grows from clarity, fairness, visibility, and respect for citizen dignity. If Nigeria manages this transition with empathy, operational coherence, and accountability, the tax state can become a foundation for shared progress, not a source of fear.
Ultimately, reform fatigue is not just a bureaucratic hurdle; it is a mirror of the relationship between state and citizen. Nigeria’s tax reforms will only endure if they rebuild trust, show tangible fairness, and invite people into a shared project of nationhood. The success of these measures will be measured less by legal texts than by the public’s sense that the state is not merely demanding, but deserving of their cooperation.
Lekan Olayiwola is a public-facing peace & conflict researcher/policy analyst focused on leadership, ethics, governance, and political legitimacy in fragile states.
Disclaimer: The views and opinions expressed here are those of the author and do not necessarily reflect the official policy or position of Legit.ng.
Proofreading by James Ojo, copy editor at Legit.ng.
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