By Samuel Ogude
It is agreed that new tax reforms: Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service (Establishment) Act, and Joint Revenue Board (Establishment) Act, – 2025, passed bills and signed into law by the President Bola Tinubu on June 26, 2025 to take effect from January 1, 2026, have been in public domain: main and social media, yet, many average Nigerians are yet to understand the policy.
Again, many too, are not aware that the objective of the policy is to streamline Nigeria tax system by reducing the number of taxes to a manageable single digit figure to enhance revenue generation, simplify compliance and address regional disparities in tax administration. While some Nigerians are apprehensive of the new tax law as they would probably lose their hard earnings in the bank, some who know the working of the law, are asking of the importance of the tax reforms on the life of an average Nigerian.
It was against this background, Bailout Magazine had an audience with many Nigerians who bared their minds. Dr. Johnson Evbie, the immediate past Head of Economics Department and currently Director, Consultancy Services, College of Education, Warri, Delta State said, the new tax policy is a redesign tax system in Nigeria. According to him, the policy is not a bad one as it would make the government to generate more money saying, before now, many Nigerians evade tax payment except civil servants. His words:” The whole idea of tax reforms is to redesign the tax system in Nigeria. Before now, of a truth, many Nigerians do not pay tax, many evade taxes, and it is only a few, especially the civil servants that pay tax from PAYE… (Pay-As –You- Earn)” He said, with the new policy, many Nigerians would be incorporated into the tax system.
On those who would be affected by the tax law, he said, it is every taxable adult. He however said, the government has exempted those whose income is less than eight hundred thousand Naira (N800, 000) per annum. His words:” If your income is less than N800, 000 per annum, you will be exempted from the PAYE (Pay-As –You- Earn) tax system whether you are a civil servant or work in private sector.”
Dr. Evbie said, on the other hand, a person who receives ten million Naira (N10, 000,000) and above would pay 25%, 30% as tax as the case may be, depending on the amount of money such an individual receives. His words:” And those who receive the range of N10,000,000 – people in higher income will pay more, 25%, 30% as tax. It is a progressive system of taxation. The poor pay less while the rich pay more.”
On the fear of some individuals that their money in the bank would be taxed hence would decide to keep their money at home, he said, no individuals’ money in the bank would be taxed, saying, this tax system is government’s further strategy to reinforce cashless system economy. According to him, if an individual redraws to the tune of five hundred thousand Naira (N500, 000) in a week from his bank account, such amount of money would be taxed as, it is better to do electronic transfer instead of physical cash as government wants to discourage physical cash withdrawals.
He however said, for every transfer made through the electronic medium, there should be small narration to state the purpose of the transaction. He said, with this system, the government is able to monitor the incomes and expenditures of Nigerians in the country as it is operational in advanced countries of the world adding that, with new tax policy, it would be difficult for people to evade tax.
While it is expected that citizens comply with government’s tax policy as obtainable in many advanced countries as the money generated ought to be used to provide social amenities for the people, in Nigeria, the case is different. This is the case, judging from the promises of the Federal Government led by President Bola Tinubu who, on his assumption of office in 2023, removed fuel subsidy with the promise that the revenue accrue would be used to provide electricity, good roads, portable drinking water, good school, health care facilities among others for the people. It has become obvious that instead of that policy to ameliorate the suffering of Nigerians, it has further put the people in endless suffering till date.
The question which battles for an answer with the new tax law is: what is the guarantee that the money generated from the new tax policy would be used to make life easy for Nigerians? On this, Dr Evbie said:” The purpose of government for people to pay tax is to generate money to build roads, provide health facilities, provide education among others, for the benefit of the people. In Europe, people pay tax and see the evidence of the money paid. So, let us give the government the benefit of doubt, let us pay the tax and we will hold the government accountable.
“The government should be able to fix our roads, hospitals school- where lecturers would be well paid. I have earlier taken on government on the promises it made when fuel subsidy was removed, it never kept its promises. Good enough, election of 2027 is by the corner, if President Bola Tinubu fails to keep to his promises on this tax reforms, Nigerians should use it to decide who the next President of the country should be. As it stands, there is lack of trust and confidence on the government, because it says a thing, it does another.“
On his part, a Senior Lecturer of the Department of Political Science, College of Education, Warri, Comrade Isitoah Emmanuel said, there is nothing new in the tax which its winds blows across the country. According to him, having listened carefully to different contributors both from the professionals, a lay man on the streets among others, on the issue of tax reforms, he has come to the realization that Nigerians are much aware that tax payment is their civic responsibility just as they affirmed that they have been paying taxes.
His words: Sometimes, no matter how educated or knowledgeable you are, you still have to listen to other people. A whole of lot of persons have spoken- in different perspectives. One of the things l realized from all the interviews both from professionals, the man on the streets, they are not ignorant of what tax is all about. Nigerians know that it is one of the civic responsibilities to pay tax. They also affirm that they have also been paying taxes…”
According to him, the issue is not that the people have not been paying tax neither they said they would not want to pay but the government does not care for the well-being of the people despite their payment of taxes. Comrade Emmanuel said, with the level of insecurity in the country and poverty among the people, the government still finds it comfortable to impose more taxes on the people, the action, he condemned in strong term. His words:” When was salary reviewed for workers in this country? With the level of inflation in the country and this government’s various forms of taxes, what would be left for an average Nigerians to live on?
Comrade Emmanuel said, policies are good but should be made to better the lives of the people not to plunge them into suffering. According to him, the political class would always compare Nigeria to what happens in other European countries when it suits their purposes, saying, in other countries where people happily pay taxes, they enjoy social amenities adding, this is contrary to Nigeria where, the more they pay taxes, the more they pass through untold hardship. His words:” Nigerians are not saying they would not pay tax, they are asking what are we paying these taxes for? The more we pay, the more our lives become difficult.”
He said, the government of President Bola Tinubu has not shown capacity, it needs to understand the people and formulate policies to ameliorate the people’s suffering instead of adding pains to them. He advised the President Bola Tinubu to focus on how to lead the people well instead of strategizing on how to be in power come 2027. Nigerians who spoke, charged the government to put smiles on the faces of Nigerians as the new tax policy holds sway in Nigeria’s economy.