Taxation and incidence of mismanagement in Nigeria

By WILFRED OBIOTIKA 

Every advanced nation in the world rose to prominence not merely because of natural resources, but through an efficient system of taxation. Tolls, duties, customs, levies, and income taxes formed the backbone of the prosperity enjoyed by Europe, Asia, and the Americas today. Ironically, Nigeria, a land blessed with abundant resources, still struggles to achieve this same prosperity because our tax systems, though existent, are undermined by corruption, poor management, and lack of accountability.

In truth, taxation is not an enemy of development—it is its very foundation. Citizens in progressive nations willingly seek employment not just for personal comfort, but also to contribute to the welfare of their nation through taxes. History even records that Jesus of Nazareth—though a penniless teacher without wages or salary—still paid taxes in obedience to the law of the land.

The new tax reforms introduced under President Bola Ahmed Tinubu’s administration have sparked fresh debate. Notably, Nigerians earning below N250,000 annually have been exempted from paying income tax. While this may appear compassionate, it sadly reflects the deep level of poverty and economic instability in the country—that a vast population falls below this income threshold and therefore cannot meaningfully contribute to national development.

Adding to this, the recent introduction of a five percent fuel tax and the requirement of a Tax Identification Number, TIN, for opening a savings account mark a new era of fiscal reforms. These policies are designed to broaden the tax net, ensure compliance, and reduce the culture of financial evasion. However, Nigerians remain skeptical: Will these taxes actually translate into better infrastructure, jobs, and social services, or will they end up as another revenue stream lost to corruption?

The truth is that taxation in itself is not the problem—leadership is. Many African nations, including Nigeria, do not lag behind because their citizens refuse to pay taxes, but because collected taxes are misused or outrightly stolen. Corruption, nepotism, and reckless looting have created a situation where roads remain bad, hospitals underfunded, and schools dilapidated—despite billions in revenue. Examples of effective use of taxes can be seen closer to home. As Governor of Anambra State, Professor Charles Soludo, demonstrated that with transparency and vision, taxes could be transformed into large-scale development projects.

Roads, bridges, and urban infrastructure flourished because the people’s contributions were effectively managed. The same principle, if applied nationally, could lift Nigeria from its present economic stagnation. But history cautions us. From the era of military dictatorships to the current democratic dispensation, the Nigerian Treasury has been treated like personal loot by successive leaders. Decades after discovering oil, we have little to show compared to nations like the United Arab Emirates, Malaysia, and Singapore—countries with fewer or no natural resources but stronger tax systems and leadership discipline.

The proposed implementation of the new tax bills in January 2026 raises further questions. Will this reform merely recycle old methods under new names, or will it mark a genuine departure from wasteful governance? Will the Treasury finally be protected from “light-fingered” politicians or will history repeat itself?

Nigeria once pinned its hopes on the Single Treasury Account introduced under President Muhammadu Buhari in 2016, which promised to block leakages and improve efficiency. Yet, even that reform became more of a blueprint than a revolution, as corruption found new avenues. Citizens therefore worry that new tax reforms, including the fuel levy and TIN requirement, may again serve the elite rather than the people.

We must remember: taxation is not a punishment, but a social contract. Citizens contribute, and in return, governments provide infrastructure, education, healthcare, and security. In developed countries, taxes fund everything from social welfare to cutting-edge research. But here, the reverse seems true—citizens pay, yet are forced to build private schools, drill personal boreholes, and hire private security.

Nigeria’s tax reforms should not become another Pyrrhic victory. If properly implemented, they could spark the development we desperately need. If not, they risk fuelling public distrust and deepening the gap between government and people. Ultimately, taxation must serve as a passport to national progress, not a toll to enrich the few. Only when transparency, accountability, and visionary leadership guide our tax system will Nigeria’s immense potential finally be unlocked. 

Obiotika wrote from the Living Grace Restoration Assembly Inc. Nkono-Ekwulobia, Anambra State.

The post Taxation and incidence of mismanagement in Nigeria appeared first on Vanguard News.