By Olusola Aliu, Olajumoke Familoni, and Oyewole Sarumi

Critique: The informal sector gap
However, our forensic inquiry reveals a significant blind spot in this pillar: The Informal Sector Paradox. Digitisation works exceptionally well for the formal sector, banks, telecoms, and manufacturing, where transactions leave a digital footprint. But Nigeria’s economy is 65 per cent informal if not more. The market woman in Balogun, the mechanic in Apo, and the transporter in Kano operate largely in cash.

There is a distinct risk that “widening the net” through digital means will disproportionately burden the organised private sector (OPS). Since the FIRS can easily access the books of listed companies, the pressure to extract “windfall taxes” or to aggressively audit these firms increases when targets are missed. Meanwhile, the vast informal economy remains elusive.

Unless the “Revenue Anchor” includes a robust strategy for “Presumptive Tax” or “Consumption Tax” (such as VAT) that captures informal spending, the burden of funding the state will continue to fall on the shrinking minority of formal businesses.

Critique: The political economy of “Agbero” taxation
Furthermore, the streamlining of taxes faces a constitutional hurdle: Federalism. Many of the “nuisance taxes” are collected by states and local governments. In Lagos, for instance, the informal tax collection by non-state actors (agberos) on the transport sector is estimated to generate billions yearly, none of which reaches the state treasury, but all of which sustains political patronage networks.

Attempting to harmonise these taxes is not just a technical exercise; it is a political declaration of war against these entrenched patronage systems. The “Revenue Anchor” assumes that state governors will voluntarily surrender their right to collect arbitrary levies in exchange for a more efficient federal system. History suggests this is a precarious assumption. Without a constitutional amendment or a grand political bargain,
“Tax Harmonisation” may die at the sub-national level.

Lesson: Technology cannot replace the social contract
The overarching lesson from Week 4 is that Technology is a tool, not a strategy.

Digitisation can close leaks, but it cannot create trust. Tax morale in Nigeria remains low because the “Social Contract” is broken. Citizens do not see the correlation between the taxes they pay and the services they receive.

Taxation is fundamentally a social contract built on trust. However, aggressively expanding the tax net during a cost-of-living crisis demands unparalleled moral authority from the state. The government cannot legitimately digitise and ruthlessly extract revenue from struggling businesses and citizens while the political elite conspicuously refuse to practise fiscal discipline. Without visible institutional integrity and a drastic reduction in the cost of governance at the executive and legislative levels, citizens will inevitably view these new taxes not as a civic duty, but as an unjust subsidy for elite consumption.

The “Tinubunomics” model attempts to fix the collection side of the equation without fully addressing the utilisation side. For revenue discipline to be sustainable, it must be paired with “Expenditure Efficiency.” If the government collects trillions more through efficient technology but squanders it on a bloated cost of governance, the “Revenue Anchor” will fail. The citizenry will find new ways to evade, and the digital walls will be breached.

Strategic implications for business
For the business community, the “Revenue Anchor” signals a permanent shift in the operating environment:
The End of Negotiated Tax: The era of negotiating tax liabilities over tea with an FIRS official is ending. Automated assessments leave little room for discretion.

The Data Trail: As the government integrates data from banks, land registries, and corporate affairs, the ability to hide income is shrinking. Compliance is no longer optional; it is a survival metric.

The Consumption Pivot: Expect a shift towards indirect taxes (VAT). Businesses must prepare for their products to carry a higher tax component at the point of sale, potentially dampening consumer demand in the short term.

Conclusion: The foundation of sovereignty
Ultimately, the Revenue Anchor is the most critical pillar for Nigeria’s long-term sovereignty. A nation that cannot tax its own economy effectively is a nation that must beg its neighbours or mortgage its future.

The shift from “Oil Rents” to “Internally Generated Revenue” is painful, technical, and unglamorous. But it is the only path to a modern state. The “Tinubunomics” model has correctly identified that the leakages must be plugged before the bucket can be filled. The success of this pillar will determine whether Nigeria remains a “petro-state” in decline or emerges as a diversified, solvent emerging market.

Concluded.

Professors Aliu, Familoni, and Sarumi are faculty members and researchers at the ICLED Business School in Lekki, Lagos, specialising in entrepreneurship, macroeconomic policy, political economy, and strategic leadership.