New tax law, old fears: Nigerians weigh reform against rising hardship

By Sar Terver

As the new tax law takes effect this month, January 2026, Nigeria finds itself at a familiar crossroads where policy ambition collides with public anxiety.

For the Federal Government, the sweeping reforms represent a long-overdue attempt to modernise an inefficient tax system, expand revenue beyond oil and plug chronic fiscal leakages.

For many Nigerians, however, the timing and process have raised fears that the burden of reform may once again fall hardest on citizens already grappling with inflation, job losses and shrinking incomes.

Signed into law in mid-2025 by President Bola Ahmed Tinubu, the tax reform package replaces several outdated statutes with a consolidated framework, restructures tax administration and introduces new levies aimed at funding national development.

Government officials insist the objective is not to punish citizens but to simplify compliance, reduce multiple taxation and ensure that more people and businesses contribute fairly to national revenue.

Yet, from Lagos to Makurdi, from market stalls to lecture halls, the dominant public mood has been one of suspicion rather than relief.

Critics argue that the law is coming at a time when Nigerians are least able to absorb additional financial pressure.

Food prices remain high, transport costs have surged and the naira’s weakness continues to erode purchasing power.

“I hear government saying it will not affect poor people, but everything government does eventually affects us,” said Chinedu Okoro, a self-employed automobile mechanic in Benin City.

“When companies pay more tax, they increase prices. At the end of the day, it is the ordinary man that suffers”, he added

Beyond economic hardship, concerns about transparency have further complicated public acceptance of the law.

Opposition figures and civil society organisations have questioned discrepancies between versions of the tax bills debated at the National Assembly and those eventually gazetted.

The controversy prompted the House of Representatives to announce steps to re-gazette the laws, a move seen by analysts as an admission that communication around the reforms has been inadequate.

For Aisha Yusuf, a civic advocate based in Lagos, the issue goes beyond taxation itself. “This is not just about paying tax. It is about trust. Nigerians want to be sure that laws affecting their daily survival are properly debated, clearly explained and implemented with fairness”, she said.

Students’ groups have also joined the pushback. The National Association of Nigerian Students, through its president, Olushola Oladoja, publicly called for a suspension of implementation, arguing that a law still under intense public scrutiny should not be rushed into force.

Labour unions have expressed similar emotions, cautioning that without strong social safeguards, the reforms could deepen inequality and fuel unrest.

On the other side of the debate are tax experts and economists who argue that Nigeria’s long-standing failure to reform its tax system has left the country vulnerable. With oil revenues increasingly unstable and public debt rising, they contend that broadening the tax base is unavoidable.

At a recent public forum in Port Harcourt, chartered accountant Ifeoma Eze noted that Nigeria’s tax-to-GDP ratio remains among the lowest globally.

“The truth is that government needs revenue to function. The problem has never been taxation itself, but poor administration, corruption and lack of visible returns. If these reforms are properly implemented, they can reduce harassment and make the system fairer”, he asserted.

Supporters of the law also point out that provisions exist to exempt low-income earners and protect small businesses, arguing that much of the public outrage is driven by misinformation. Still, they concede that the government failed to sufficiently carry citizens along before the rollout.

That gap between policy intent and public perception now poses the biggest threat to the reform’s success.

Taxation, analysts agree, works best when citizens believe their contributions translate into tangible public benefits such as roads, healthcare, education and security. In a country where such trust has been repeatedly broken, skepticism is hardly surprising.

For many Nigerians, the question is not whether the state should collect taxes, but whether it can convincingly demonstrate accountability. “We have paid taxes before. What we want to see is evidence, not promises”, Okoro said.

Backing the reforms, Nigeria’s former minister of Finance, Kemi Adeosun who appeared as a Guest on Channels Television inside sources programme,
said, “I am happy that the tax harmonization policy. I was always wondering, how many numbers (Tax Identification Number, National Identity Number, Bank Verification Number and others) are we going to have?”.

“We will begin to see that even people that are doing contracts with governments that have not paid tax in this Country. Of course, we will have data that you can see.

“I am very confident that the stake will increase and the people avoiding taxes can be seen. Low income earners are actually been exempted”, according to Adeosun, “this reform is going for higher ones – businesses and people that are not playing the game fairly”.

Commenting on the alleged alteration of the tax law document, the former minister also said, “as somebody that has been a victim of rumour without a substantial evidence, I will say prove it”.

“He who alleges must prove . So, if somebody is saying that, prove it right now. Sometimes, the rumour could be a smokescreen by certain individuals who say we do not want the tax reform implemented for some reasons.

“But as a professional economist, and as somebody who is very passionate about Nigeria, I will say this is very important”, she said.

TheNewspad reports that as implementation begins, the new tax law stands as both an opportunity and a test. It could mark a turning point toward fiscal responsibility and national development, or it could deepen the gulf between the government and the governed if public concerns continue to be brushed aside.

Ultimately, the balance of public interest may rest not on the text of the law itself, but on how transparently it is enforced and how sincerely government listens to the voices of those expected to pay.

Without that trust, even the most ambitious reform risks becoming another symbol of policy disconnected from the realities of everyday Nigerian life.