By Olusola Aliu, Olajumoke Familoni, and Oyewole Sarumi

With the fiscal bleeding stopped (Step 1) and market prices discovering their true value (Steps 2 and 3), the Tinubunomics sequence transitions to structural sustainability with Step 4: The Revenue Anchor. You cannot effectively digitise and expand taxation while a subsidy scam exists, as the public will inherently rebel against funding a leakage. Sequencing logic dictates that aggressive tax reform can only gain compliance and yield results after the most egregious distortions have been amputated. Yet, extracting more revenue while the population is still reeling from unmitigated prior shocks continues to test the fragile political containment.

In the anatomy of a nation’s economy, revenue is the oxygen. For nearly five decades, Nigeria existed in a state of “revenue asphyxia,” masked only by the volatile injections of crude oil receipts. We operated a classic “Rentier State” model: the government did not need to tax the people efficiently because it could simply tax the oil wells.

However, the fiscal crisis of 2023, precipitated by the collapse of oil production and the ballooning of debt service, exposed the fragility of this model. Nigeria’s Tax-to-GDP ratio stood at a meagre 10.8 per cent, significantly below the African average of 18 per cent and the OECD standard of 34 per cent. This was not merely a statistic; it was an indictment of state capacity.

The fourth pillar of the “Tinubunomics” reform architecture, the Revenue Anchor, represents a paradigm shift. Unlike traditional austerity measures that seek to balance budgets by slashing expenditure or raising tax rates, this pillar prioritises “Revenue Discipline” and “Digitisation.” Led intellectually by the Presidential Committee on Fiscal Policy and Tax Reforms, this approach posits that Nigeria does not have a revenue problem; it has a collection problem.

This article interrogates the mechanics of this shift: Can technology truly replace political will in revenue collection? Does streamlining taxes stimulate growth, or does it merely reduce the state’s footprint? And critically, does “widening the net” effectively capture the informal economy, or does it simply tighten the noose around the already compliant formal sector?

The pre-condition: The leakage economy
To understand the necessity of the Revenue Anchor, one must analyse the “Leakage Economy” that preceded it.
Historically, Nigeria’s revenue framework was characterised by three structural defects:
Multiplicity of taxes: Businesses faced over 60 distinct levies from federal, state, and local authorities. This created a high “compliance cost” that discouraged formalisation.

Analog collection: The reliance on manual collection allowed for a massive “human interface.” Revenue collectors, from the FIRS to local government touts, acted as gatekeepers, often diverting funds for personal or political gain.

GOE opacity: Government Owned Enterprises (GOEs), agencies like NPA, NIMASA, and NCC, operated as quasi-independent fiefdoms, generating trillions in revenue but remitting fractions to the Consolidated Revenue Fund.

“Tinubunomics” diagnostic concluded that raising tax rates in such an environment would be counter productive. It would incentivise further evasion and crush the fragile productive sector. Therefore, the strategy shifted to “Vertical Efficiency” (collecting more from existing taxes) and “Horizontal Expansion” (bringing more people into the net).

The mechanism: Digitisation as a fiscal weapon
The core mechanism of this pillar is the weaponisation of technology against leakage. This is not simply about filing returns online; it is about “Source Deduction” and “Automated Remittance.”

By integrating the Treasury Single Account (TSA) with the payment platforms of GOEs, the reform aims to bypass the “human discretion” that previously determined how much an agency remitted. If a port operator pays a fee to the NPA, the system should ideally split that payment, sending the federal share directly to the treasury instantly.

This “Algorithmic Governance” reduces the agency problem. In 2024, we observed the initial fruits of this discipline, with non-oil revenue rallying even as the broader economy struggled. This suggests that the money was always there; it was just being intercepted.

Tax harmonisation: The Laffer Curve in action
The proposal to streamline the tax code from over 60 distinct taxes to a single-digit number (targeting roughly 8 core taxes) is an application of the Laffer Curve theory.

The theory posits that beyond a certain point, increasing the number or rate of taxes actually reduces total revenue by discouraging economic activity. By eliminating “nuisance taxes”, levies that cost more to collect than they generate, the government reduces the friction of doing business.

The “Revenue anchor” logic suggests that a simplified tax environment encourages formalisation. Small businesses that previously remained in the shadow economy to avoid harassment might voluntarily enter the tax net if the obligation is clear, singular, and digital. This is “Voluntary Compliance Theory”: people pay taxes when it is easy to do so and when they perceive the system as fair.

To be continued tomorrow.

Profs. Aliu, Familoni, and Sarumi are faculty members and researchers at the ICLED Business School in Lekki, Lagos, specializing in entrepreneurship, macroeconomic policy, political economy, and strategic leadership. This 11-part series is adapted from their latest peer-reviewed research paper, “Reform Sequencing under Democratic Stress: Fiscal Correction, Currency Liberalisation, and Institutional Anchoring in a Resource-Dependent Economy.”