The Nigerian Economic Summit Group (NESG) has warned that illegal levies, perceived tax injustice and poor transparency in public spending are undermining Nigerians’ confidence in the country’s tax system, despite broad acceptance of the government’s right to collect taxes.
Findings from the NESG Tax Perception Survey 2026 showed that 74.4 per cent of households accepted the government’s right to collect taxes. However, trust in tax authorities averaged just 2.01 out of four points, highlighting a gap between acceptance of taxation and confidence in its administration.
The survey covered 18,000 households and 9,097 businesses across Nigeria’s 36 states and the Federal Capital Territory (FCT). It found that 67.2 per cent of households had encountered informal levies imposed by non-government groups or individuals at least once, while 13.9 per cent of businesses had been asked to pay charges they considered illegal.
The findings were presented on Tuesday in Abuja at the 32nd Nigerian Economic Summit (NES#32), during a session examining how government could rebuild public trust, promote fairness and encourage voluntary tax compliance.
The session, titled Rethinking the Tax Contract: Building Trust, Fairness and Compliance, brought together government officials, civil society representatives and technology experts to discuss ways to make tax administration more transparent, equitable and efficient.
The survey also revealed a gap in tax awareness between households and businesses. While 40 per cent of households reported a moderate understanding of tax laws, 80 per cent of businesses said they were aware of the laws.
Other concerns included unequal tax burdens, differences in access to digital tax services and limited channels for reporting complaints.
The NESG said improving compliance would require more than compelling citizens and businesses to pay. It called for simpler procedures, clearer communication, fair administration and visible evidence that tax revenue was improving people’s lives.
Speaking at the session, Olusegun Adesokan, Executive Secretary of the Joint Revenue Board, said ongoing reforms were designed to build a tax system founded on fairness, equal treatment, accountability and transparency.
He said the government was working to harmonise taxes collected by state and local authorities to ease the burden of multiple levies on individuals and businesses.
According to Adesokan, 20 states have adopted the proposed harmonised tax framework, while legislation was being reviewed in another 17 states.
He also highlighted the introduction of uniform presumptive tax regulations by the Minister of Finance. The rules are intended to promote consistent tax treatment across the country, particularly for small businesses that may not maintain complete financial records.
Adesokan said greater independence for state revenue authorities was another priority in the reform process.
Of the 37 subnational tax authorities assessed, 15 were fully autonomous, 15 were partly autonomous and seven had no autonomy, he said.
Greater institutional independence, he added, would help revenue agencies recruit qualified personnel and strengthen their capacity to collect taxes professionally.
Vahyala Kwaga, Country Director of BudgIT, said restoring public confidence would depend significantly on whether governments could demonstrate that tax revenue was translating into better public services.
He argued that governments should assess performance not only by whether they meet revenue and spending targets, but also by the impact of public expenditure on citizens.
“Far too often, budgets appear to be target setting exercises,” Kwaga said.
He said taxpayers would be more willing to comply when they could see improvements in hospitals, schools, roads and other public infrastructure funded by government revenue.
Kwaga urged governments to explain how public funds were spent and provide citizens with opportunities to participate in decisions on taxation and public expenditure.
He also called for accessible complaint channels, including tax ombudsmen at the state level, to help taxpayers resolve disputes with revenue authorities.
Public participation, he said, should extend beyond collecting opinions. Governments should demonstrate how citizens’ complaints and recommendations influence policy decisions.
Kwaga further argued that access to quality public services should not depend solely on how much tax an individual pays, stressing the need for tax and spending policies that account for differences in income and social needs.
Yinka Babalola, Country Director of the International Budget Partnership, said the problem was not necessarily that Nigerians rejected taxation, but that many questioned how taxes were collected and whether taxpayers were treated equally.
“Nigerians accept the principle of taxation, but they’re not very sure that the practice is actually being carried out the way they would expect,” Babalola said.
He urged tax authorities to publish annual reports detailing tax waivers, incentives and other benefits granted to individuals and businesses.
