Trust Deficit Threatens Nigeria Tax Reform as Citizens Link Compliance to Service Delivery
A growing trust deficit is threatening the success of Nigeria’s latest tax reform, as citizens increasingly link compliance to tangible improvements in public services. According to a new SBM Intelligence survey released on Thursday, more than two-thirds of Nigerians do not trust the government to properly use tax revenues, highlighting a major challenge for President Bola Tinubu’s administration as it rolls out the 2025 tax reform Acts aimed at boosting revenue collection and fiscal sustainability.
Despite widespread scepticism, the survey reveals that public resistance is not primarily due to the scale of new tax measures. Around three-quarters of respondents said they would be more willing to pay taxes if they could see real improvements in essential services such as electricity, road infrastructure, and security. “The willingness to comply exists, but it is transactional,” the report noted, emphasizing that citizens increasingly tie tax compliance to measurable government performance.
Regional differences further complicate reform efforts. In the Southwest, particularly Lagos, greater awareness of the new tax laws corresponds with stronger opposition, with about half of respondents citing concerns over legislative transparency and fears that enforcement unfairly targets middle-class earners. In the North, distrust is even more pronounced; nearly 80% of respondents in Bauchi State expressed scepticism, fueled by geopolitical concerns and suspicions about the government’s collaboration with French tax authorities, which some critics describe as a form of “digital colonialism.”
Challenges also arise from Nigeria’s large informal sector. Many informal business operators already pay daily levies to unions or market associations, making new government taxes feel like an additional financial burden. Meanwhile, in the formal sector, lowered bank reporting thresholds have sparked worries among small business owners and professionals that the reform disproportionately targets visible taxpayers while failing to address broader revenue leakages.
SBM Intelligence warns that the success of Nigeria’s tax reform depends less on technical policy design and more on rebuilding public trust through visible service improvements. Analysts describe the reform as a potential “tax swap,” in which citizens may accept structured taxation only if the state delivers better services than existing informal systems. Without demonstrable progress, the report concludes, the reform risks deepening frustration, undermining compliance, and becoming a politically costly failure.
source: The Sun