Tax Reform Not The Enemy by Goodluck Opiah

“ TAX REFORM IS NOT THE ENEMY

By Rt. Hon. Goodluck Opiah

Nigeria stands today at a pivotal moment in its economic journey, a crossroads between stagnation and sustainable growth, between uncertainty and renewed optimism. Central to this moment is the recently enacted National Tax Law, a reform measure that, when understood and implemented properly, can transform our economic landscape, enhance prosperity, deepen growth, promote equity, and meaningfully tackle poverty.

Yet, as with all bold initiatives, misconceptions have emerged. Some have branded the law as burdensome, anti-business, and inimical to the welfare of ordinary Nigerians. Others fear that tax burdens will stifle enterprise and discourage investment. I write this piece to dispel these misunderstandings, provide context, and show, with clarity, why this tax law is not merely necessary but a foundation for a stronger, fairer Nigeria.

At the heart of the debate is the idea that paying taxes is inherently negative. This could not be further from the truth. Taxes are the fuel that powers a nation’s ability to provide infrastructure, security, healthcare, education, and social welfare. To conflate paying taxes with oppression is to misunderstand the very essence of collective responsibility.

Critics argue that the new tax law introduces “new taxes” that will impoverish citizens. In reality, it is a modernization and rationalization of Nigeria’s tax framework, removing ambiguity, closing loopholes, promoting compliance, and making the tax system more equitable and transparent. It is not designed to extract wealth unfairly but to ensure that wealth is fairly shared and productively reinvested.

For too long, Nigeria relied excessively on oil revenue, leaving the country vulnerable to price shocks and neglecting the development of other productive sectors. This new tax law helps correct that imbalance by broadening the tax base, supporting non-oil economic engines, and ensuring that all sectors contribute their fair share to national development.

A powerful economy is one where individuals and businesses believe in the future, invest in productive ventures, and generate value that benefits all. The new tax law is structured in a way that encourages investment. By clarifying tax obligations and reducing arbitrage opportunities, the law creates a more predictable environment for both local and international investors. Revenues generated from improved tax compliance will fund critical infrastructure such as roads, power, ports, digital infrastructure that form the backbone of business growth. The new tax law is also structured to support Small and Medium Enterprises (SMEs). Recognizing the dynamism of SMEs as job creators, the law incorporates provisions that protect fledgling businesses from excessive tax burdens, while integrating them into the formal economy where they can access financing, training, and support. Moreover, a transparent tax regime levels the playing field. No longer will informal businesses evade tax while compliant businesses are disadvantaged. This engenders confidence and fairness in the marketplace.

By generating predictable revenues, the government can plan and execute long-term development strategies rather than resorting to ad-hoc borrowing that saddles future generations with unsustainable debt.

Some critics point to the relatively high tax rates in nations like the United States, the United Kingdom, Germany, and Japan as evidence that taxes hamper economic growth. But a deeper look tells a different story: these countries pair their tax systems with strong governance, accountability, and reinvestment in human capital and infrastructure.

For example: In Germany, corporate tax revenues help fund robust vocational training programmes, ensuring that the workforce remains competitive in advanced manufacturing and technology sectors. In the United States, progressive tax structures finance world-class universities, research institutions, and infrastructure that attract global capital. In the United Kingdom, value-added taxes (VAT) and income taxes support universal healthcare and public services that provide a safety net for citizens, boosting productivity and social stability.

The message is clear: developed countries do not succeed despite taxation – they succeed because taxes are harnessed strategically to enhance growth, equality, and opportunity. Nigeria’s new tax law aspires to the same principle: we pay taxes not as a burden but as an investment in our collective future.

One of the greatest strengths of the new tax law is its focus on equity. Wealthier individuals and larger corporations will contribute their fair share, while protections are built in for vulnerable citizens and nascent businesses. The goal is not to punish success but to spread success more widely.

Consider this simple truth: a child in rural Imo with access to quality education and health services is more likely to become a productive adult. A farmer with access to improved seeds, irrigation, and affordable credit will produce more and contribute more to the economy. A young entrepreneur with access to capital and a supportive tax regime will create jobs that elevate entire communities.

This is not theoretical. This is the tangible promise of tax-driven development.

Poverty in Nigeria is multifaceted. It is not merely about income. It is about access to education, healthcare, sanitation, electricity, and opportunities. When properly implemented, the new tax law addresses these fundamental challenges by: (a) Funding Social Safety Nets: Tax revenues will expand social protection programmes for the poor and vulnerable, especially women, children, the elderly, and persons with disabilities, ensuring that nobody is left behind. (b) Enhancing Healthcare Delivery: An improved tax base means the government can invest more in primary healthcare, disease prevention, maternal care, and rural health facilities. Healthy citizens are productive citizens. © Improving Education: From universal basic education to skills acquisition centers and vocational training, tax resources can transform Nigeria’s demographic dividend into a productive workforce. (d) Expanding Economic Infrastructures: Reliable electricity, functional roads, access to broadband internet, and efficient transportation systems are not luxuries. They are essentials for lifting people out of poverty. Tax revenues enable these investments.

The narrative that Nigeria’s economy is fragile or perpetually on the brink of crisis ignores the resilience and ingenuity of our people. Our economy – diversified, youthful, and full of potential – is capable of unprecedented growth. Already, sectors such as agriculture, technology, creative industries, and services have shown dynamic expansion.

The narrative of a fragile economy could also be tied to Peter Obi’s assertion that “prosperity cannot come by taxing poverty”. This may also sound persuasive, but like others, it collapses under serious economic scrutiny. Obi’s statement assumes, without evidence, that Nigeria’s new tax law is designed to tax the poor rather than fix a broken fiscal system that has impoverished the poor for decades. That assumption is flawed, misleading, and dangerous to national progress.

Nigeria’s problem is not excessive taxation; it is chronic revenue failure. Nigeria’s tax-to-GDP ratio has hovered between 6-9 per cent for years – one of the lowest in the world. By comparison, South Africa collects over 25 per cent, Brazil over 30 per cent, and OECD countries average above 33 per cent. These are not poor countries taxing their way into misery; they are functioning states funding development. Nigeria, by contrast, has tried Obi’s implied approach: low tax effort, weak enforcement, and overreliance on oil, and the result has been persistent poverty, collapsing infrastructure, and unsustainable debt.

So the honest question is this: if low taxation created prosperity, why is Nigeria poor?

The truth Obi avoids is that Nigeria has been running a welfare illusion without welfare revenue. Government borrows to fund salaries, prints money to cover deficits, and watches inflation destroy purchasing power. Inflation is the most regressive tax of all, and it punishes the poor far more brutally than structured taxation ever could. Between 2015 and 2023, Nigeria’s public debt more than tripled, while debt servicing consumed over 90 per cent of federal revenue in some years. This is not because taxes were high, but because they were insufficient. When revenue fails, the poor pay through inflation, unemployment, decaying services, and insecurity.

Obi says wealth must come before taxation. That argument ignores how wealth is actually created. Wealth does not emerge in a vacuum. It requires roads, power, ports, education, healthcare, security, and legal institutions. None of these are funded by slogans. They are funded by taxes. Every country Obi admires, from Vietnam to Germany, expanded its tax base before mass prosperity, not after. Vietnam’s tax-to-GDP ratio exceeds 18 per cent, double Nigeria’s, yet it lifted over 40 million people out of poverty in three decades. Nigeria tried the opposite path and got the opposite result.

Obi’s claim that Nigeria is “taxing poverty” also ignores a basic fact: most poor Nigerians do not pay income tax. The new tax law focuses on broadening the base, formalising economic activity, closing loopholes, and ensuring that profitable entities contribute fairly. The real scandal is that wealthy individuals, digital businesses, and large informal operators have escaped taxation for years while compliant workers and SMEs carried the burden.

That is not compassion; it is injustice. The argument also romanticises informality. Informal economies do not empower people; they trap them. Businesses that remain informal cannot access credit, insurance, export markets, or scale. Formalisation is not punishment. It is an economic graduation. Nigeria’s informal sector accounts for over 50 per cent of GDP but contributes a fraction of tax revenue. This imbalance forces the government to either borrow or inflate. Both options hurt the poor more than any well-designed tax policy.

Let us also address the moral contradiction. Obi rightly demands accountability and transparency, but then implies that taxation should be resisted because governance is imperfect. By that logic, no country would ever develop. Governance improves because institutions are funded, not because they are starved. You do not cure weak governance by bankrupting the state.

The new tax law is not perfect, and its implementation must be closely monitored. But opposing reform outright is not principled. It is economically irresponsible. Nigeria cannot continue to run a modern state on charity, oil luck, and debt. Prosperity does not come from avoiding taxes. It comes from using taxes intelligently. The countries that defeated poverty did so by collecting revenue, investing it, and building institutions, not by pretending revenue was optional.

The real choice before Nigeria is not between taxing poverty and creating wealth. It is between structural reform and permanent stagnation. Peter Obi’s argument offers moral comfort but no fiscal solution. Nigeria needs solutions, not soundbites.

The new tax law will not create poverty. It will accelerate the prosperity trajectory by providing predictable revenue for public investments, encouraging formalization of informal sectors, attracting both domestic and foreign direct investment, enhancing transparency and accountability in fiscal management, and strengthening institutions that foster business confidence.

In the long term, this means higher GDP growth, more jobs, better public services, and greater prosperity for citizens across all states, including Imo. Nigeria’s new tax law is not a burden. It is a shared responsibility. It is a commitment by all of us to invest in our future, strengthen our institutions, and unlock the full promise of our nation.

The Renewed Hope Ambassadors believe that misunderstanding breeds fear, but clarity fosters confidence. It is vital that citizens – especially the privileged class, business owners, civil society, and government work together, not in opposition, but to implement this law fairly and productively.

For those who fear that tax collection is a threat to their livelihoods, I say this: the government is not taking from you; the government is building with you. When taxes are properly collected and transparently spent, the dividends return in the form of roads that connect markets, schools that educate our children, hospitals that save lives, and an economy that offers opportunity to every willing hand.

In the end, the success of this tax law will not be measured merely by numbers collected, but by lives transformed, by communities uplifted, by businesses thriving, and by a nation that finally turns its vast potential into shared prosperity. Nigeria can and will rise. And this tax law, which is designed for equity, growth, and resilience, is a cornerstone of that rise.