The proposed tax reforms under President Bola Ahmed Tinubu’s administration are generating growing concerns about their potential to deepen economic inequality and adversely affect vulnerable groups across Nigeria.
As part of efforts to boost revenue generation and address the country’s fiscal challenges, President Tinubu has announced plans to overhaul the country’s tax system. However, several economic experts, civil society groups, and social commentators have raised alarms that these reforms could disproportionately burden low-income households, small businesses, and marginalized communities, thereby exacerbating the already widening gap between Nigeria's wealthy elite and its struggling citizens.
The tax reform proposals include an increase in VAT, the introduction of new taxes on digital transactions, and expanded tax compliance measures for informal sectors. While the government argues that these measures are necessary to improve national revenue, critics warn that they could exacerbate the existing economic inequalities that plague Nigeria.
“These reforms fail to consider the deep socioeconomic disparities in the country,” said Chika Adebayo, a senior economist at the Nigerian Economic Advocacy Group (NEAG). “The burden of increased VAT and the additional taxation on digital services will disproportionately affect the poorest Nigerians, who already spend a significant portion of their income on essential goods and services.”