Nigerian economist Rukayat Akingbade, a Tax Specialist at Deloitte has thrown her weight behind the newly proposed tax reform bill, arguing that—if implemented properly—it could serve as a powerful engine for economic growth, job creation, and improved government revenue.
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The bill, currentl
y under review in the National Assembly, aims to restructure Nigeria’s tax system, broaden the revenue base, and streamline compliance for both individuals and businesses.
While the proposed legislation has already sparked mixed reactions, experts say it represents a golden opportunity to strengthen the country’s financial position at a time when government budgets are stretched and debt servicing costs are rising.
Nigeria has long struggled with low tax-to-GDP ratios, hovering around 10%—far below the African average of 16% and significantly less than the global average of 33%. This gap has left the government heavily reliant on oil revenues, making the economy vulnerable to fluctuations in global oil prices.
The proposed bill seeks to: increase tax collection efficiency, close loopholes that allow for tax evasion, simplify tax laws to make compliance easier, and expand the tax net to include more eligible citizens and businesses.
According to the economist, the bill’s biggest strength lies in its broadening of the tax base. “Nigeria has millions of economically active citizens and small businesses operating outside the formal system,” he said. “By bringing them into the tax net, the government can generate more revenue without necessarily increasing rates for those already paying.”
Additionally, Akingbade stated that the government must invest in tax education, ensure the technology infrastructure works, and build trust through fairness and transparency. The informal sector still the backbone of Nigeria’s economy must be gradually onboarded, not coerced. With these, tax reform is not being approached as a hammer, but as a bridge that connects government responsibility with citizen contribution in a transparent and equitable manner.
She also pointed out that with greater fiscal stability, the government would be better positioned to invest in infrastructure, education, and healthcare—all of which have a direct impact on economic growth.
The Benefits in Focus
More Government Revenue – This would allow for greater public investment in roads, power supply, and other essential services.
Job Creation – Infrastructure projects funded through increased revenue could generate thousands of jobs.
Business Confidence – A transparent and predictable tax environment can attract foreign investment.
Economic Diversification – Reduced dependency on oil revenues will make the economy more resilient.
Despite all, not everyone is convinced. Critics argue that without proper enforcement and oversight, the new system could simply add another layer of bureaucracy without delivering results.
Others worry that higher compliance costs could hurt small businesses if not carefully managed. “The government must ensure that tax administration is friendly and digitalized to reduce stress for taxpayers,” the expert cautioned.
One of the bill’s most promising features is its emphasis on digital tax filing and payment systems. This could drastically reduce corruption, improve record-keeping, and make compliance faster for both individuals and companies.
Countries like Rwanda and Kenya have successfully implemented similar systems, leading to a surge in tax revenues and improved public trust in the tax system.
For the bill to succeed, Nigerians need to understand why taxes matter. Public campaigns explaining how tax money is used—and showing visible results—could improve compliance rates.
If citizens see their taxes being used to fix roads, improve power supply, and upgrade public services, experts say willingness to pay will naturally increase.
Nigeria’s proposed tax bill is more than just legislation—it’s a potential game-changer for the economy. But the outcome will depend on political will, transparency, and the government’s ability to implement it effectively.
If managed well, this reform could not only boost revenue but also lay the groundwork for a more diversified and resilient Nigerian economy. By Shalom Chidozie for USAfricaLive.com
