"Let's not mince words. Nigeria's new tax regime, which landed on our heads this January, is the most ambitious attempt to reshape the state since, well, since the last time someone had a bright idea in Abuja. They're calling it a generational reset. From where I sit, and from where millions of Nigerians actually sit in traffic, in market stalls, in offices wondering how to make ends meet, it feels more like a grand, high-stakes gamble."
"The theory, as always, is impeccable and one I support. Nigeria's tax-to-GDP ratio is a national embarrassment, fluctuating between 9% and 13%, depending on who you believe. For perspective, that's not just low, it's pathological. It means President Bola Tinubu's government, in 2026, is functionally insolvent, unable to fund the basics of civilisation without borrowing or hoping for an oil-price miracle."
"The new law, with its progressive rates that exempt the poorest and its sweeteners for small businesses, is meant to be the cold shower we need. It is the foundational stone for a post-aid Nigeria, where we finally pay for our own schools, hospitals and roads. On paper, it's a work of art. But Nigeria has a notorious habit of chewing up and spitting out beautiful theories."
Nigeria enacted a far-reaching tax reform in January that introduces progressive rates, exemptions for the poorest, and incentives for small businesses. The reform aims to boost the tax-to-GDP ratio, reduce dependence on oil revenues and finance public goods such as schools, hospitals and roads. Current tax receipts hover between 9% and 13% of GDP, leaving the government functionally insolvent in 2026 without borrowing or oil-price gains. The reform faces political and social risks because the state has long failed to deliver basic services, leaving citizens skeptical and the middle class feeling like an ATM. Implementation and legitimacy remain major challenges.
Read at www.theguardian.com
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