Can Tinubu’s Tax Reforms Mend Nigeria’s Broken Social Contract?
By Adebisi A. Oyeshakin
When President Bola Ahmed Tinubu signed four landmark tax reform bills into law on June 26, 2025, he did more than just enact new legislation; he lit a fuse on a national conversation already simmering with anxiety. In the bustling markets of Lagos and the formal corridors of Abuja, the same question echoes: Is this the long-awaited blueprint for fiscal sustainability, or merely a more sophisticated squeeze on a populace already buckling under economic strain?
The government’s narrative is one of progress and modernisation. The new framework, comprising the Nigeria Tax Act, the Nigeria Tax Administration Act, and the acts establishing the Nigeria Revenue Service (NRS) and the Joint Revenue Board (JRB), aims to untangle a notoriously complex system. By consolidating laws, replacing the FIRS with the NRS, and creating the JRB to coordinate federal, state, and local efforts, the reforms promise to expand the tax base, simplify compliance, and end the predatory practice of multiple taxation that has stifled businesses for decades.
There are genuinely progressive elements. Shielding individuals earning less than ₦800,000 annually from Personal Income Tax and protecting small businesses with turnovers under ₦100 million is a clear, commendable effort to inject fairness and protect the most vulnerable. The ambition is undeniable. Yet, the swiftness of the process—from transmission to the National Assembly in October 2024 to presidential assent in June 2025—has left a lingering unease. While supporters laud the urgency as a sign of decisive leadership, critics rightly question whether such haste allowed for adequate public digestion and scrutiny. The true test, however, will not be the speed of legislation, but the sincerity and transparency of its implementation, starting January 1, 2026.
The fundamental challenge facing these reforms is not legal or economic, but profoundly psychological. It is a crisis of trust. For the average Nigerian, the debate is not about the technicalities of tax bands or administrative structures; it is about the broken social contract. For too long, citizens have watched their contributions disappear into a void of mismanagement, returning as potholed roads, understaffed hospitals, and perennial power cuts. A 2024 National Bureau of Statistics report revealing that only 14% of working Nigerians pay direct tax is not a sign of widespread evasion, but a sobering referendum on governmental credibility. To many, paying taxes feels less like a civic duty and more like funding a kleptocracy.
This is the poisoned well from which the new Nigeria Revenue Service must drink. The NRS and the coordinating Joint Revenue Board represent a monumental opportunity to reset this relationship. A streamlined, professional institution free from political interference could be the catalyst for change. But if it becomes merely the FIRS under a new name, cloaked in fresh acronyms but burdened by old habits, it will become another layer of impenetrable bureaucracy, further eroding public faith.
The government must understand that taxation is a two-way street. In nations like Denmark or the United Kingdom, citizens tolerate high tax rates because they can literally see the returns on their investment—in universal healthcare, efficient public transport, and world-class education. They are not just taxpayers; they are stakeholders in a functioning system. In Nigeria, the contract is perceived as null and void. The government asks for trust but has provided scant evidence that it can be a trustworthy custodian of public funds.
For these reforms to succeed, they must be accompanied by what we might call the “Three Pillars of Tax Trust.”
First, Radical Transparency. The JRB should not operate behind closed doors. It must be mandated to publish quarterly, citizen-friendly reports detailing revenue collected and, crucially, where it was allocated. Imagine a digital dashboard where a business owner in Kano can see that a portion of their Company Income Tax contributed to a new primary healthcare centre in their locality. This traceability transforms an abstract obligation into a tangible contribution.
Second, Unwavering Accountability. The government must couple this reform with a demonstrably fiercer commitment to prudence and anti-corruption. Revenues must be ring-fenced for visible projects. Leakages must be plugged through rigorous, independent audits, and those found diverting public funds must face swift and public justice. Citizens need to see that their naira is being guarded as zealously as it is collected.
Third, Inclusive Communication. The government cannot simply announce the reforms and retreat. It must launch a sustained, multilingual public awareness campaign. This should not just explain the new obligations but, more importantly, articulate the benefits and the protections for the poor and small businesses. It must frame tax not as a punitive measure, but as the lifeblood of national development—a shared investment in our collective future.
The African context offers valuable lessons. Rwanda’s successful tax overhaul two decades ago was successful because it was built on a foundation of transparency, where citizens saw tangible results. Ghana’s experience with the E-Levy also underscores the critical need for extensive stakeholder engagement to secure buy-in.
President Tinubu’s government stands at a pivotal moment. These reforms have the potential to wean Nigeria off its dangerous reliance on oil revenues and volatile borrowing, creating a stable fiscal base for long-term planning. But this will only happen if the government recognises that it is not just selling a new policy; it is negotiating a renewal of trust.
The success of the 2025 tax reforms will not be measured in trillions of naira collected alone. The true metric will be found in the shifting perceptions of the market woman in Onitsha, the young tech entrepreneur in Yaba, and the civil servant in Maiduguri. Do they believe their payment will lead to a better school for their child, a smoother road for their goods, or a more reliable power supply for their business?
When the government can answer “yes” with credible evidence, then taxation will cease to be a symbol of burden and become a badge of shared citizenship. The law has been signed, but the real work of rebuilding a fractured social contract has only just begun.
Adebisi Adams Oyeshakin is a PRNigeria Fellow