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Joseph Tegbe, Chairman of the National Tax Policy Implementation Committee (NTPIC), has said Nigeria’s long-standing tax compliance challenges are largely driven by weak public trust in government institutions.
Speaking at the 2026 Tax Conference organised by BusinessDay Media in Abuja, Tegbe noted that years of limited accountability have eroded the social contract between citizens and government, making tax compliance more difficult to enforce.
According to him, rebuilding trust will require sustained reforms and greater transparency in how public resources are managed.
“The problem is that the social contract has been broken for so many years. It didn’t just happen today, so it will take time to rebuild trust with the people,” Tegbe said.
He emphasised that stronger civic engagement—particularly at the local government level—will be essential in restoring confidence in public institutions. When citizens are able to hold public officials accountable for service delivery, he said, they are more likely to support tax obligations.
Tegbe added that rebuilding this trust is critical to the success of ongoing fiscal reforms aimed at improving Nigeria’s revenue generation and strengthening public finance management.
Also speaking at the conference, Michael Ango, Acting Executive Chairman of the Federal Capital Territory Internal Revenue Service (FCT-IRS), said early reactions to tax reforms were shaped by misinformation and public apprehension.
According to Ango, inaccurate and poorly informed commentary initially created fear among taxpayers. However, ongoing public engagement by policymakers has helped clarify the objectives of the reforms and address some of those concerns.
“The first challenge is the one of apprehension that was created by some of the negative commentary — uninformed commentary,” he said.
Ango also highlighted behavioural challenges that continue to affect tax compliance in Nigeria, noting that many citizens only respond to tax obligations when enforcement measures are applied.
“For us as tax administrators, the next challenge is attitude. You don’t renew your driver’s licence until you are forced to. You don’t pay your taxes until the tax authority writes to you,” he said.
He added that weak enforcement mechanisms and attempts by some individuals to use personal connections to avoid tax assessments continue to undermine the effectiveness of the system.
To improve transparency and taxpayer engagement, Ango revealed that authorities are considering the introduction of a tax ombudsman—an independent office that would provide support to taxpayers who need clarification or assistance regarding their tax assessments.
“If a taxpayer receives an assessment and doesn’t understand it, they should be able to walk into the ombudsman’s office and receive assistance,” he explained.
Tax Reforms Target Investment and Revenue Leakages
Meanwhile, Uche Uwaleke, Professor of Capital Markets and Director of the Institute of Capital Market Studies at Nasarawa State University, said the current wave of tax reforms is also designed to promote investment while addressing revenue leakages in the system.
Uwaleke noted that changes to the capital gains tax framework have increased the tax rate from 10 percent to 30 percent for certain high-value transactions. However, investors who reinvest proceeds from share sales within the Nigerian capital market will be exempted from the tax.
According to him, the exemption is intended to discourage capital flight while encouraging reinvestment in domestic financial markets.
He also explained that the revised framework allows investors to offset losses from one investment against gains from another, which could reduce the overall tax burden in certain cases.
Uwaleke emphasised that the reforms are focused primarily on expanding the tax base rather than increasing existing tax rates. For example, the value-added tax rate remains unchanged at 7.5 percent.
Instead, the government expects to boost revenue by closing loopholes and bringing previously untaxed economic activities into the system.
One example, he noted, involves companies operating in free trade zones that sell goods in the domestic market while still enjoying tax exemptions—an arrangement the reforms aim to address.
“With higher revenues expected from these reforms, the next advocacy should be on ensuring quality spending that improves social services and the welfare of Nigerians,” Uwaleke said.
He added that fiscal policy goes beyond taxation alone and must also include responsible government spending and sustainable public debt management.
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