Nigeria tax reforms will play a central role in modernising the economy and strengthening public finances, according to Iyabo Masha, Director of the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development. Speaking in Abuja ahead of the G-24 2026 Technical Group Meeting scheduled for February 18–20, Masha said ongoing reforms could help Nigeria transition into a more efficient and inclusive economic system capable of meeting citizens’ long-term aspirations.
Addressing journalists, Masha — the first African to lead the G-24 since its establishment over five decades ago — emphasised that tax and domestic resource mobilisation remain the backbone of sustainable development. She explained that governments fund growth primarily through taxation, borrowing, or asset sales, but described taxation as the most stable and least macroeconomically disruptive option. “Tax and domestic resource mobilisation are fundamental to economic development,” she said, noting that effective taxation enables governments to fund infrastructure, education, healthcare, and maintain law and order.
Highlighting structural weaknesses in developing economies, Masha observed that many countries record tax revenues as low as seven per cent of GDP, compared to stronger-performing nations that generate between 25 and 30 per cent. Countries with stable public services typically maintain tax-to-GDP ratios in the mid-20s. Reflecting on Nigeria’s system, she described the previous tax framework as fragmented, with weak implementation limiting revenue collection. However, she said the new policy aims to broaden the tax base, bring more companies into the formal net, adjust certain rates, and introduce capital taxation measures designed to encourage efficient production.
While acknowledging that reforms may initially create discomfort, Masha maintained that the long-term benefits outweigh the short-term pain. She said the measures could deepen formalisation, expand employment opportunities, and strengthen fiscal sustainability. “It will be painful in the initial period. But over time, it would allow the Nigerian economy to transition into a real modern economy,” she stated, underscoring the broader vision of economic transformation.
Beyond domestic reforms, Masha outlined key themes for the upcoming G-24 meeting, which Nigeria is hosting as chair country. The discussions will cover digital services taxation, climate change and energy transition, financial inclusion, regional trade integration, and debt sustainability. Panels will also assess 80 years of the Bretton Woods institutions — the International Monetary Fund and the World Bank — and explore future reforms. With about 45 delegates confirmed, the meeting, hosted by Nigeria’s Ministry of Finance and the Central Bank of Nigeria, is expected to shape developing countries’ positions ahead of global financial negotiations.
source: punch