Tax Reforms: Between Necessity and Controversy; Distortion and Misinformation, by Zekeri Idakwo Laruba
As Nigeria ushers in 2026, the controversy surrounding the implementation of sweeping tax reforms has become one of the most consequential public policy debates of this political cycle. What began as an effort to modernize a fractured tax system has evolved into a constitutional flashpoint
Change is rarely welcomed, especially when it directly affects the lives and livelihoods of the general public. Reforms, by their nature, invite resistance, suspicion and political pushback, no matter how well-intentioned they may be. President Bola Ahmed Tinubu’s tax reforms followed this familiar trajectory almost from the outset.
From the moment the proposals entered public discourse, they attracted early blows, not only from those directly affected, but from a broader coalition of political actors, legal purists and economic sceptics uneasy with both the substance of the reforms and the manner of their execution. As Tinubu himself would later frame it, reform is never painless, but postponing difficult decisions, he argued, only deepens the eventual cost. It is within this tension, between economic necessity and public discomfort, that the controversy over Nigeria’s tax reform agenda has unfolded.
At the core of the administration’s case is fiscal necessity. Nigeria’s economic structure has long been constrained by weak non-oil revenue mobilisation, a fragmented tax system and a tax-to-GDP ratio that remains below 10%, one of the lowest among comparable African economies. Against this backdrop, the Tinubu administration insists that comprehensive tax reform is not optional but inevitable.
Officials argue that the reforms are designed to harmonise multiple taxes, broaden the base, eliminate nuisance levies and improve compliance, rather than simply raise rates. The objective, they say, is to correct structural distortions that punish compliance while rewarding informality.
Leading this defence is the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, who maintains that much of the public anxiety surrounding the new laws is driven by misinformation rather than their actual content. Using the aviation sector as an example, Oyedele argues that the reforms lower, rather than increase, operating costs. He points to the removal of the long-standing 10% withholding tax on aircraft leases and the introduction of full VAT neutrality, allowing airlines to reclaim VAT on assets, consumables and services, with refunds mandated within 30 days to ease liquidity pressures.
He further clarifies that existing import duty exemptions on aircraft, engines and spare parts remain intact, while fears of sharp increases in ticket prices are overstated. Even under a worst-case VAT scenario, Oyedele contends, the net impact on fares would be marginal and far below alarmist projections.
On corporate taxation, he notes that the reforms create a pathway to reduce Company Income Tax from 30 per cent to 25% and consolidate multiple profit-based levies into a single development levy, thereby reducing complexity and compliance costs.
Beyond Oyedele’s policy defence, the Federal Inland Revenue Service (FIRS) Chairman, Zacch Adedeji, has also consistently framed the reforms as relief-oriented rather than revenue-extractive. Adedeji has publicly insisted that the laws do not introduce new taxes or increase existing rates, but instead streamline administration, reduce the number of taxes Nigerians pay and improve efficiency. He has emphasized that most low-income earners will remain exempt from PAYE, while micro and small businesses will pay zero corporate income tax and VAT. Adedeji has also underscored that implementation is slated for January 2026, allowing time for stakeholder engagement and system readiness.
While Adedeji has largely avoided direct engagement with allegations of post-legislative alterations, his stance has been clear: the reforms are economically sound, legally enacted and should proceed as scheduled.
Yet the controversy surrounding the reforms has been driven less by economics than by questions of process and constitutional order. Critics allege that the versions of the tax laws eventually gazetted differ from what was passed by the National Assembly, raising accusations of post-legislative alteration, distortion or outright forgery. Whether these discrepancies are substantive or merely technical remains fiercely contested, but the implications are far-reaching.
Former Vice President Atiku Abubakar has emerged as the most prominent political voice challenging the reforms on this ground. His argument is direct: gazetting is an administrative act, not a legislative one, and cannot legitimise changes not approved by parliament. To Atiku and others who share this view, the issue transcends tax policy and strikes at the heart of separation of powers. If the executive can amend laws after passage, they warn, parliamentary authority risks being reduced to a formality.
The Tinubu administration, however, has shown little inclination to slow down. In public statements and in his New Year message to Nigerians, the President framed resistance as an inevitable consequence of meaningful reform. He signalled clearly that implementation would proceed as planned, describing the reforms as “once-in-a-generation” fiscal reset, essential to Nigeria’s economic survival and long-term stability. To Tinubu, hesitation carries a higher cost than controversy.
This posture reflects a governing philosophy rooted in decisiveness and momentum. Supporters see resolve and clarity of purpose; critics see rigidity and an unsettling disregard for institutional anxieties. What is undeniable is that the President has prioritised delivery over consensus, betting that improved fiscal outcomes will ultimately vindicate his approach.
Politics has inevitably shaped the debate. For the opposition, tax reform amid rising living costs offers a potent rallying point. For the presidency, yielding ground risks emboldening resistance across other reform fronts, from fuel subsidy removal to exchange rate liberalisation. The tax debate has thus become a proxy battlefield for broader struggles over power, credibility and economic direction.
Still, to dismiss the controversy as mere partisan manoeuvring would miss its deeper significance. Nigeria faces a genuine dilemma: how to pursue urgent economic reform without eroding constitutional safeguards and public trust. Sound policy implemented through contested processes risks legal challenge, investor uncertainty and social backlash. Yet allowing procedural disputes to paralyse reform entrenches fiscal weakness and policy inertia.
This, then, is not much ado about nothing. It is much ado about how Nigeria governs itself in an era of hard choices. Tinubu’s tax reforms may yet deliver tangible economic gains, but their durability will depend not only on revenue outcomes, but on whether they command institutional legitimacy and public confidence.
In the end, sustainable reform demands more than presidential will. It requires transparency, legislative clarity and a careful balance between urgency and restraint. How this tension is resolved will shape not just the future of Nigeria’s tax system, but the credibility of reform itself.