Nigeria Needs to Expand Tax Base Rather Than Increase Rates, Says Finance Minister
Nigeria’s Minister of Finance and Coordinating Minister for Economic Affairs, Taiwo Oyedele, emphasized on Thursday that the country’s pressing revenue challenge lies in broadening the tax base rather than raising tax rates. He asserted that increasing the number of taxpayers is the solution, rather than imposing higher taxes.
During a visit to the Federal Ministry of Finance following the inaugural National Tax Awareness Day organized by the Chartered Institute of Taxation of Nigeria, Oyedele acknowledged the day’s activities, which included a community walk in Use Market, taxpayer education initiatives, and a visit to the Nigeria Revenue Authority Headquarters.
This awareness campaign coincided with the one-year anniversary of President Bola Tinubu signing Nigeria’s landmark tax reform law into existence on June 26, 2025.
Oyedele lauded the Chartered Institute of Taxation for its commitment to the federal government’s tax reform agenda, citing persistent public misconceptions about the tax system as a major barrier to compliance. He pointed out that many citizens perceive government discussions on taxation as mere efforts to extract more money from the populace.
“Our tax revenue remains insufficient. The focus should not be on raising taxes, but on ensuring that those who owe taxes fulfill their obligations,” Oyedele stated. He expressed a dedication to equity in tax administration and outlined the transformative potential of establishing an effective tax system in Nigeria’s economic development.
Moreover, he urged the institute to create an annual award to recognize Nigeria’s most compliant taxpayers, aiming to foster voluntary tax compliance among citizens.
Earlier, at Use Market, Innocent Ohagwa, the 17th Director of the Chartered Institute of Taxation of Nigeria, introduced a tax awareness campaign designed to address gaps in public understanding of tax reforms and enhance voluntary compliance. Despite the reforms having been in effect for a year, concerns persist among Nigerians regarding their implications for both businesses and personal finances.
Ohagwa noted, “While the law is being implemented, many taxpayers are still confused about what has changed, what remains the same, and how these provisions will influence their economic lives.” He attributed the ongoing fears to widespread misconceptions, with some believing that reforms introduce new taxes across the board, while others think they solely aim to boost government revenue.
In reality, the reforms come with significant reliefs and incentives for individuals and businesses. For instance, individuals can now claim up to 20% rental relief on their annual payments (up to N500,000), and essential goods and services—including food, education, and healthcare—can benefit from zero value-added tax incentives.
Ohagwa highlighted that small businesses with an annual turnover below N100 million and fixed assets under N250 million would be exempt from corporate income tax, capital gains tax, and development tax. This change allows numerous small enterprises to reinvest in growth and innovation.
Despite these incentives, Ohagwa reminded the public that tax compliance remains a legal duty. “Compliance is not merely a burden; it represents a citizen’s contribution to nation-building. For tax systems to function effectively, there must be trust. Taxpayers need to meet their obligations, while the government must ensure accountability and transparency,” he urged.
He called on business owners and traders to obtain tax identification numbers, maintain accurate records, promptly file returns, and seek professional guidance as needed from the Nigeria Revenue Authority or the FCT Inland Revenue Service.
He explained that the National Tax Awareness Day was established to address the notable lack of information among Nigerians regarding tax reforms. Uze Market was selected for the campaign due to its significance as a grassroots commercial hub, and the timing was strategic, as it aligns with the peak filing period for numerous corporate taxpayers.
Following the market initiative, the CITN delegation visited the Nigeria Revenue Authority Headquarters, reinforcing their commitment to enhancing tax awareness, promoting voluntary compliance, and implementing Nigeria’s tax reforms.
Mohammed Abubakar, Executive Director for Finance and Corporate Services at the Authority, highlighted that this visit was meaningful as it celebrated the one-year anniversary of the tax reform bill. He stated, “This milestone marks the dawn of a new era in Nigeria’s tax administration characterized by simplicity, fairness, transparency, and efficiency.”
Abubakar articulated that the reforms aim to establish a tax management system that is technology-driven and responsive to taxpayers’ needs. He added that effective revenue mobilization relies on public awareness and trust in tax authorities. “Understanding tax obligations and having confidence in tax institutions fosters greater compliance among taxpayers,” he said.
The discussion also focused on the agency’s digital transformation agenda, which includes initiatives such as Rev360 and other technology-driven platforms designed to enhance tax administration efficiency. Dr. Gbenga Daniel, Group Director of the Medium Tax Group, noted that the Nigeria Revenue Authority remains committed to collaborating with professional organizations to improve taxpayer education and service delivery.
The event drew attendance from NRS directors, members of the CITN Board, tax professionals, and industry stakeholders, concluding with Oyedele’s appeal to Nigerians to increasingly embrace the nation’s evolving tax system by focusing on compliance rather than misconceptions about high taxation.
The multi-faceted tax reforms signed into law by President Bola Tinubu in June 2025 include the Nigeria Tax Code and associated legislation, fundamentally updating the aging tax system in Nigeria.
