Nigeria Doesn’t Have A Tax Problem. It Has A Trust Problem

When the Finance Minister recently declared that Nigeria was “still not generating enough revenue from tax,” many Nigerians did not hear an economic observation. They heard another warning that the Government is looking in the wrong direction once again.Yes, the Minister later explained that he was not calling for higher tax rates but for better compliance among those who are already liable to pay taxes. On paper, that sounds reasonable. In practice, however, it reflects a government that continues to view citizens primarily as sources of revenue rather than people battling one of the worst cost-of-living crises in recent history.

Timing matters in public policy

This is a country where inflation has remained high. Food prices have become unbearable. Transport fares have doubled and, in many cases, tripled. Electricity tariffs continue to rise. Small businesses are shutting their doors. Young graduates cannot find jobs. Families are skipping meals, while many workers discover that their salaries barely last two weeks. Against this backdrop, talking about insufficient tax revenue feels less like fiscal responsibility and more like fiscal insensitivity.

The average Nigerian is already paying more than enough. Perhaps not always through formal income taxes, but certainly through the countless unofficial taxes that define daily life. Citizens pay for private security because public security often fails them. They buy generators because electricity is unreliable. They drill boreholes because public water systems barely function. Parents pay exorbitant school fees because public education has deteriorated. They spend fortunes on healthcare because government hospitals remain overstretched.

What exactly are Nigerians not paying for?

The Government cannot continually demand more while delivering less. The conversation should not begin with how to collect more taxes. It should begin with why Nigerians have so little confidence in what the Government does with the taxes already collected. Citizens are more willing to pay taxes when they see value for money. That is how successful economies work. Roads are maintained. Hospitals function. Schools improve. Public transportation is reliable. Law enforcement protects lives and property. In such societies, taxation is viewed as a contribution toward shared progress.

Nigeria presents the opposite experience. For decades, taxpayers have watched budgets expand while infrastructure struggles. Public office continues to be associated with extravagant spending. The cost of governance remains one of the highest recurring complaints in national discourse. Leakages, waste, duplication of agencies, abandoned projects, and weak accountability continue to undermine public confidence. Before asking whether Nigeria generates enough tax revenue, perhaps the Government should ask whether Nigerians receive enough value from the revenue already generated.

That is the more uncomfortable question

Nobody disputes that Nigeria’s tax-to-GDP ratio is relatively low compared with many other countries. Economists have made that point for years. But comparisons become meaningless when they ignore context. Higher tax compliance in developed economies exists alongside higher incomes, stronger institutions, more efficient public services, and greater trust in government. Those countries did not build prosperity by taxing poverty. They expanded their economies first and collected more revenue as businesses and citizens became wealthier.

Nigeria appears determined to reverse that sequence. Instead of focusing relentlessly on expanding production, reviving manufacturing, supporting agriculture, reducing unemployment, lowering the cost of doing business, and attracting investment, the Government conversations increasingly revolve around taxation and revenue mobilisation.

But taxation is not a substitute for economic growth. A thriving economy naturally produces more taxable income. Struggling citizens do not. If the Government genuinely wants higher tax revenue, it should make it easier for businesses to survive, not harder. It should close loopholes that allow powerful interests to evade taxes. It should digitise revenue collection, reduce corruption, eliminate wasteful spending, and drastically cut the cost of governance. Those measures would improve public finances without further squeezing ordinary Nigerians.

Above all, the Government must rebuild trust. Trust is the foundation of every effective tax system. People willingly contribute when they believe their sacrifices will translate into better roads, better schools, safer communities, and better opportunities for their children. Without that trust, every conversation about taxation sounds like another attempt to take from citizens who already have too little.

Nigeria’s greatest economic challenge today is not that the Government lacks enough tax revenue. It is that millions of Nigerians lack enough income to live with dignity. Until that reality changes, statements emphasizing insufficient tax revenue will continue to sound anti-people, not because taxation is inherently wrong, but because a government that asks struggling citizens to think first about its revenue before their survival has misunderstood the order of priorities.

Chigozie Nnuriam is a freelance writer based in Lagos.