The purpose of this article is not merely to examine the hype, misconceptions and realities surrounding Nigeria’s new tax reforms, but to situate them within the broader context of democratic governance. In doing so, it seeks to spotlight issues that have been overlooked and to bring greater clarity to grey areas that have received insufficient attention.

This approach is necessary because extensive commentary has already emerged from supporters, critics, and opponents of the new tax laws. However, one fundamental issue has largely been ignored: the deep-rooted corruption within the public sector, which remains a major deterrent—and often a justification—for widespread tax evasion among Nigerians.

Given this reality, there is little value in revisiting arguments that have already been exhaustively explored. Instead, this intervention aims to separate substance from noise by interrogating in a historical context not only the promises and pitfalls of the new tax regime, but also the governance challenges confronting President Bola Tinubu as he experiments and navigates the highly risky ecosystem of bold reforms.

Many of the tax laws now being replaced were inherited from Nigeria’s colonial past and were designed primarily to serve the interests of its former colonial ruler, the United Kingdom. Although Nigeria attained political independence in 1960, significant elements of Britain’s tax framework remained embedded in the country’s fiscal system until the latest reforms came into effect on January 1 of this year.

This persistence was not accidental. Despite independence, Nigeria remained economically dependent on the UK—though not to the extent seen in France’s continued influence over its former Francophone colonies. British policy, both then and now, has been driven largely by the extraction of economic value from Nigeria, a nation abundantly endowed with natural resources.

One of the mechanisms through which this objective was pursued was a tax system structured not to promote Nigeria’s development, but to advance colonial economic interests—designed, in essence, to enrich the colonial power rather than foster the growth and prosperity of its former outpost.

Several tax statutes inherited from the colonial era continued to operate in Nigeria long after independence but have now been overhauled under the new tax regime. These include the Personal Income Tax Act (PITA), which governs individual income taxation through a progressive structure with allowances for reliefs, dependents, pensions, and life insurance. Also included is the Companies Income Tax Act (CITA), which regulates the taxation of corporate profits for both local and foreign companies operating in Nigeria.

Other reformed statutes are the Capital Gains Tax Act (CGTA), which imposes a 10 per cent tax on gains from the disposal of chargeable assets, with exemptions for securities and certain reorganisations; the Stamp Duties Act, which applies to legal and commercial instruments; the Customs and Excise Management Act (CEMA), which governs import duties and excise taxes on products such as alcohol, tobacco, and petroleum; and the Education Tax Act, which mandates a 2 per cent levy on company profits to support tertiary education through the Tertiary Education Trust Fund (TETFund).

Although these laws were amended periodically after independence, they remained part of Nigeria’s legacy tax framework until President Bola Tinubu signed the new tax reform bills into law on June 26 last year. The reforms formally took effect at the beginning of the current year- last Thursday.

In practical terms, the Taiwo Oyedele–led Presidential Tax Reform Committee allowed a six-month window for public sensitisation before implementation commenced on January 1. Despite this lead time, the reforms have generated intense debate and controversy.

It is therefore unsurprising that the rollout of the new tax regime has encountered resistance, particularly from opposition politicians who have predictably drawn attention to what they consider its shortcomings and potential risks. This pushback has filtered into public opinion, leaving many Nigerians uneasy and suggesting that the architects of the reforms have not sufficiently convinced citizens that the changes will serve their interests.

Concerns have been compounded by inadequate communication, partial information, and outright misinformation, all of which have contributed to the perception that the new tax system lacks transparency. Consequently, President Tinubu’s reform agenda is once again facing strong headwinds, with public skepticism casting a pall over the new laws.

But Tinubu being a veteran of many such battles is determined to proceed with its implementation against all odds and believing that at the end he will prove skeptics wrong as he has done with the removal of petrol subsidy and managed floatation of the naira which have improved Nigeria’s economic fundamentals.

Addressing the trust deficit in the new tax laws is now an urgent task for the administration. It must deploy clear, sustained, and transparent communication to dispel the narrative that the reforms are anti-people and reposition them as a policy framework aimed at shared prosperity.

If Nigerians are to accept the reforms as beneficial and comply willingly with tax obligations, the government must more convincingly demonstrate how the new system will drive development and improve living standards for the majority. Without this reassurance, compliance risks being achieved only through coercive enforcement—an approach that echoes colonial-era practices, when tax collection was imposed with force and fear, prompting many men to flee into hiding at the sight of tax officials.

That atmosphere of dread was so pervasive that women eventually took to the streets in what became known as the Aba Women’s Riots.

The 1929 protests were a response to oppressive taxation by the British colonial administration, following provisions of the Native Revenue Amendment Ordinance of 1927 that sought to extend taxation to women. The policy was widely perceived as an assault on women’s economic autonomy and traditional authority. In response, thousands of Igbo women from southeastern Nigeria mobilised, employing traditional resistance methods such as “sitting on a man” to ridicule and shame officials accused of corruption and misappropriation. The protests escalated to attacks on European-owned businesses, banks, colonial courts, and the release of prisoners.

Ultimately, the British authorities withdrew the proposed tax and reviewed the Warrant Chiefs system, marking a historic victory for the women involved.

That uprising, led by women in Aba—present-day Abia State—occurred nearly a century ago. It was driven largely by a lack of public understanding of taxation and a deep-seated belief that tax revenues would be stolen by corrupt officials, a problem already entrenched in the colonial administrative system. Anti-colonial resentment also played a decisive role in fueling the protests.

Nigeria, however, is no longer under colonial rule. Since attaining self-governance in 1960, the country has operated as an independent state for over six decades. Unlike the colonial administration, which pursued extraction rather than development, Nigeria’s post-independence leaders are expected to design tax policies that promote national growth and improve citizens’ welfare. This is the rationale the government advances in defending the new tax reforms, insisting that they are intended to broaden the tax base rather than increase the burden on citizens already strained by previous reforms.

Nonetheless, a major obstacle remains: corruption. Many Nigerians argue that corruption has not only persisted since the era of the Aba Women’s Riots but has in fact worsened. This perception reinforces fears that tax revenues will once again be diverted through graft instead of being used for public benefit.

Given Nigeria’s history of resistance to new taxes, it is reasonable to hope that the government has undertaken adequate scenario planning, including security preparedness, in anticipation of possible unrest.

This concern is reinforced by recent security lapses. In my column last week, where I examined the United States’ Christmas Day airstrikes on suspected terrorist camps in Sokoto State, I warned that surviving militants could relocate to less secure areas and target vulnerable communities. Sadly, this last weekend which is barely one week after, reports soon emerged that about 40 Nigerians were killed and several others abducted in a market in Niger state during the militants’ retreat. This tragedy suggests that Nigerian security agencies may not have sufficiently planned for the aftermath of the joint U.S.–Nigeria operation.

That failure raises legitimate worries that similar gaps in contingency planning could emerge if public protests erupt in response to the new tax regime, as occurred in Aba in 1929.

To me, one of the most effective ways to secure public acceptance of the tax reforms is to convince Nigerians that their contributions will be used responsibly. The strongest assurance would be tangible proof that past leakages in public finances have been blocked—not merely through official pronouncements, but through visible transparency and accountability in governance.

Unfortunately, this critical reassurance has not been emphasised enough. Instead, official messaging has focused largely on claims that individuals earning less than ₦800,000 yearly will be exempt from taxation. The Nigeria Labour Congress (NLC), the umbrella body for public-sector workers, has challenged this assertion, arguing that the laws were enacted without adequate consultation and could adversely affect the majority.

The NLC has also renewed its call for a minimum wage increase, even though the next review is not due until 2027, following President Tinubu’s decision to shorten the wage review cycle from five to three years during the last federal government versus labour unions negotiations followingthe last major dispute.

In a recent statement, the NLC declared:

“We enter this new year not with naïve hope, but with a fortified resolve, strengthened by struggle and clarity.

The promise of more faithful and meaningful engagement from the federal government, as pledged by the President, His Excellency, Senator Bola Ahmed Tinubu—secured through our relentless pressure and collective voice—has opened a potential vista for dialogue. We acknowledge this platform and will engage deeply, consciously, and patriotically.”

Beyond the formal economy, a large proportion of Nigeria’s economic activity takes place in the informal sector.

This reality makes it imperative for the architects of the new tax regime to deliberately embed incentives that would encourage operators in this largely unregulated space to comply voluntarily.

Onyibe, an entrepreneur, public policy analyst, author, and former commissioner in Delta State government, sent this piece from Lagos.