Nigeria’s Tax Revenue Imperative: Minister Urges Broader Compliance Over Rate Hikes
The Nigerian government’s primary challenge in revenue generation lies not in increasing tax rates, but in expanding the tax net to encompass more eligible citizens and businesses, according to Taiwo Oyedele, the Minister of Finance and Coordinating Minister of the Economy. Speaking in Abuja on Thursday during a reception for the Chartered Institute of Taxation of Nigeria (CITN), Oyedele highlighted that a significant barrier to tax compliance in Nigeria is public misunderstanding, with many citizens erroneously believing that all government discussions on taxation are solely aimed at extracting more funds.
The Minister’s remarks followed the CITN’s maiden National Tax Awareness Day, an initiative that included a public awareness walk, taxpayer sensitisation at Wuse Market, and a visit to the Nigerian Revenue Service (NRS) headquarters. This awareness campaign coincided with the first anniversary of President Bola Tinubu signing Nigeria’s landmark Tax Reform Acts on June 26, 2025. Oyedele commended the CITN for its support of the Federal Government’s tax reform agenda, reiterating that the nation is “still not getting enough revenue from taxes.” He stressed the administration’s commitment to promoting fairness in tax administration, asserting that rectifying the country’s tax system will have a profound impact on national development. He also encouraged the CITN to consider establishing annual awards to recognise compliant taxpayers, thereby fostering voluntary compliance.
Innocent Ohagwa, the 17th President of the CITN, elaborated on the Institute’s efforts to bridge the information gap surrounding the new tax laws. He noted that despite the laws being enacted and implementation underway, many taxpayers and stakeholders remain uncertain about the changes and their implications for businesses and personal finances. Ohagwa addressed misconceptions that the reforms have introduced taxes on all economic activities, clarifying that the legislation includes significant reliefs and incentives. For individuals, these include a rent relief of up to 20 per cent of annual rent paid, capped at N500,000, and higher tax exemption thresholds for compensation related to loss of employment or personal injury. Furthermore, essential goods and services such as food, education, healthcare, electricity transmission, and non-oil exports now benefit from zero-rated Value Added Tax (VAT).
For businesses, the reforms offer substantial benefits. Companies with an annual turnover not exceeding N100 million and fixed assets below N250 million are now exempt from Companies Income Tax, Capital Gains Tax, and the Development Levy. This exemption is expected to empower thousands of small businesses to reinvest in growth, job creation, and innovation. Targeted incentives have also been introduced for sectors including agriculture, aquaculture, dairy production, cocoa processing, and animal feed manufacturing. Additionally, eligible investors can avail themselves of tax credits under the Economic Development Incentive. Ohagwa reminded taxpayers that while compliance is a legal obligation and a civic duty contributing to nation-building, it is not a burden. He emphasised that effective taxation relies on trust, with taxpayers fulfilling their obligations and the government upholding accountability, transparency, and the judicious use of public resources. He urged traders, entrepreneurs, and business owners to obtain Tax Identification Numbers, maintain accurate records, file returns promptly, and seek professional guidance when necessary. Wuse Market was strategically chosen for the sensitisation campaign as a key grassroots commercial hub where taxpayer education is critically needed, and the month of June was selected due to its significance as the peak filing period for many corporate taxpayers.
The CITN delegation’s visit to the NRS headquarters saw a reaffirmation of both organisations’ commitment to enhancing tax awareness, promoting voluntary compliance, and ensuring the effective implementation of the tax reforms. Mohammed Abubakar, Executive Director of Finance and Corporate Services at the NRS, who received the delegation on behalf of Executive Chairman Dr. Zacch Adedeji, described the signing of the Tax Reform Acts as a historic milestone ushering in a new era of tax administration characterised by simplicity, fairness, transparency, efficiency, and service delivery. Abubakar highlighted that the reforms are designed to foster a trusted, technology-driven tax administration system responsive to taxpayers and businesses, underscoring that sustainable revenue mobilisation depends on public awareness and confidence in tax institutions, not solely on enforcement. He stated that taxpayers are more inclined to comply when they understand their obligations, recognise the value of taxation, and trust the institutions administering the laws. The NRS also showcased its digital transformation agenda, including platforms like Rev360, aimed at improving tax administration. Dr. Gbenga Daniel, Group Director of the Medium Tax Group at the NRS, affirmed the Service’s ongoing collaboration with professional bodies to deepen taxpayer education and enhance service delivery, noting the shared vision with CITN for improved tax administration and voluntary compliance for national development. The event convened senior officials from the NRS, CITN Governing Council members, management staff, tax professionals, and industry stakeholders. The tax reform bills, signed into law in June 2025, represent a significant overhaul of Nigeria’s tax laws, modernising the system.
