Poor public services could undermine tax compliance under Nigeria’s new tax regime, with only 22 per cent of households expressing satisfaction with public services, according to a survey by the Nigerian Economic Summit Group (NESG).

The 2026 Tax Perception Survey Report found that only 24.3 per cent of households had seen or heard of a tax-funded project in their communities, while 29.2 per cent said such services were unavailable in their areas.

Firms also rated all nine public services covered by the survey below the midpoint of the assessment scale, with water supply and sanitation receiving the lowest ratings.

The findings highlighted the challenge facing the government’s tax reform efforts, following the implementation of the Nigeria Tax Act 2025 on January 1, 2026, as taxpayers question the benefits of paying taxes amid poor service delivery.

While 74.4 per cent of households agreed that the government had the right to collect taxes, only 27 to 30 per cent expressed some or a high level of trust in federal, state and local tax authorities. Local government tax offices recorded the lowest trust levels. Trust was higher among businesses, with 48.7 to 52.2 per cent of firms reporting moderate or higher confidence in tax authorities.

Despite concerns about public services and tax administration, 95.8 per cent of firms asked to file returns or provide records in the previous year said they complied, although the figures were self-reported.

The survey also found that 67.2 per cent of households reported paying informal levies outside the state system at least once, while 13.9 per cent of firms said they had been asked to pay fees they considered illegal.

Businesses linked their willingness to pay taxes to improvements in public services. While 48.2 per cent said they would definitely pay more if service delivery improved, 43.1 per cent agreed that firms should refuse to pay taxes until services got better.

Among firms that did not comply with tax requirements, 61.6 per cent cited high tax burdens, 41.8 per cent pointed to cash-flow constraints, and 34.9 per cent blamed multiple taxes and levies.

Awareness of the new tax law also remains limited. About 60 per cent of households said they were not at all or only slightly familiar with the Nigeria Tax Act 2025, while just 15 per cent had sought official information about it.

Although 68.8 per cent of households had internet access, only 19.2 per cent had used a digital tax system, indicating limited adoption of online tax services.

To improve compliance and confidence in the tax system, NESG recommended that every tax payment carry a verifiable receipt and be routed through a traceable government account. It also called for sanctions where unauthorised collections are confirmed and regular disclosure of projects funded with tax revenue.

The group further proposed that the Joint Revenue Board coordinate federal, state and local tax authorities to improve consistency in tax administration.

The survey covered 18,000 working adults, with one respondent per household, and 9,097 firms across the 36 states and the Federal Capital Territory between July and September 2026. Focus group discussions and interviews with tax officials were also conducted in six states that received additional sampling.