Oyo State Governor, Seyi Makinde, and the Chairman of the Federal Inland Revenue Service (FIRS), Zacch Adedeji, have called for a humane and strategic approach in efforts to expand Nigeria’s tax net to include the informal sector.
Speaking at the opening of the 157th meeting of the Joint Tax Board (JTB) held at The Jagz Hotel, Iyaganku, Ibadan, both leaders emphasised the need for understanding and collaboration rather than coercion in widening the tax base.
Themed “Taxation of the Informal Sector: Potentials and Challenges,” the two-day meeting brings together top tax administrators, policy makers, and key stakeholders from across the country to discuss ways of integrating the informal economy into Nigeria’s taxation system.
In his opening remarks, Governor Makinde noted that the informal sector is the backbone of the local economy and must be engaged using technology and empathy for meaningful outcomes.
“We must develop modalities that foster partnership with the informal sector,” Makinde said. “Taxation should not be about enforcement alone. It must be about understanding, support, and empowerment so that those in the informal economy can thrive and contribute meaningfully.”
FIRS Chairman Zacch Adedeji echoed similar sentiments, urging tax stakeholders to adopt inclusive strategies that encourage voluntary compliance and ensure the sustainability of the nation’s revenue generation efforts.
Makinde also reiterated his administration’s commitment to balancing fiscal responsibility with inclusive economic growth while highlighting the significance of the state’s recent initiatives that have improved on its revenue generation drive.
Makinde said, “This theme is timely, but it must also be aligned with the real work that we are currently doing in your various states and across Nigeria to improve the tax system, especially as you are trying to find solutions to the informal sector. I have listened to the chairman of the JTB. He’s on, I guess, well, formalise the sector, and then you can tax them.
“But you are all here with diverse experiences, and then you can sit down and talk. Find out what the best path forward is. How do you balance the challenges that have been identified? And also, how do we look forward? I have heard people talk about, oh, in Nigeria, we do not have any reason or any need to have any challenge with poverty.
“This is a rich country. Yes, we are rich in natural resources, but it’s a poor country, because economic prosperity cannot be based only on our natural resources. For you to have economic prosperity, you must ensure that you go out there, mobilise your people.
“You must have knowledge and skills. And you must also have intensive production. You must produce something. That is when you can move from being resource-rich to economic prosperity.
“To move away from federal allocation to generating incomes, having productivity at the local level. So in our state, we are not just talking about expanding the tax net. We are actively ensuring that people are productive.
“And then we are moving the revenue base of the state forward. We recognise that the informal sector, made up of traders, artisans, commercial drivers, and small businesses, forms the backbone of our local economy.
“Historically undertaxed, this segment has not become a focus of strategic action.”
He urged the participants to seize the opportunity of the meeting to come out with a framework that will not cause pain to the informal sector. He also listed his expectations from the experts and stakeholders after the meeting.
“So you spend the next two days challenging yourselves. And I do hope that you come up with a solution. We are taking concrete steps to bring more people into the tax net without burdening them unnecessarily. So our initiatives include mass tax education, where you let people know you want to pay for these services.
“We have to find a way to pay for it. Also, simplified processes, where you can stay in the corner of your business premises and pay your taxes there. And also incentive-linked compliance. So, we encourage people to have voluntary tax compliance for benefits, such as access to employment schemes and credit facilities.
“We have a lot to do. And that is why I am particularly hopeful about the outcome of this meeting. So in the next two days, I look forward to hearing about further proven methods of capturing revenue from highly mobile individuals and how to track informal businesses, and how that will work side by side with formalisation of the informal sector.
“I also like to hear the solution from this room as it regards ways to deepen partnership with stakeholders like the transport union and the market association. Also, I look forward to innovations in using data and technology to track and support informal businesses without excessive bureaucracy. So this forum is an opportunity to exchange ideas on how to move from intent to impact across states and sectors.
“In our state, we are committed to continuous improvement. We are also, like Femi said, strengthening the capacity of our state board of internal revenue to manage compliance more effectively with empathy and fairness. The future of taxation, especially of the informal sector, depends on how well we balance enforcement with understanding”, the governor added.
Earlier in his welcome address, FIRS Chairman, who also doubles as the JTB Chairman, Zacch Adedeji, acknowledged Oyo State’s pioneering role in national development and tax administration.
He noted that the informal sector accounts for 92.6 percent of Nigeria’s employed population, according to the National Bureau of Statistics (NBS), emphasising the sector’s critical importance in Nigeria’s economic structure.
Adedeji stated that the JTB, currently transitioning to the Joint Revenue Board (JRB) with expanded scope and responsibilities, would continue to harmonise and modernise tax systems nationwide.
He cautioned against any attempt of adding tax burden on the poor and charged the meeting to focus on conceiving strategies to formalize the informal sector before any tax attempt.
He said, “Our meeting here provides the right platform to brainstorm innovative and equitable ways of bringing the informal sector into the tax net without alienating or overburdening it,” Adedeji noted.
While stressing that the administration of President Bola Tinubu is concerned about the well-being of operators of the informal sector, noting that the ongoing efforts to capture the players into the taxable net are to properly organise the sector for effective economic planning and not to tax them.
Also speaking earlier, Executive Chairman of the Oyo State Internal Revenue Service, Mr. Femi Awakan who also spoke on the state’s tax reforms and challenges reported that Oyo state’s IGR has grown from N1.6 billion per month in 2019 to about N8.5 billion per month in Q1 2025, which according to him marked a 240 percent increase over the same quarter.
Despite these gains, Awakan highlighted key challenges affecting tax administration, including inadequate public investment, limited institutional autonomy, technological gaps, and poor tax culture as he called for greater financial and operational independence for revenue services and investments in data-driven and technology-enabled tax systems.
He said, “We must reach the unreached, capture the untouched and tax the sector once considered negligible,” Awakan said. “But we must also ask: How do we do this without stirring the hornet’s nest or being tagged anti-masses?”
In a sideline interview, the Executive Secretary of the JTB, Olusegun Adesokan, assured that stakeholders will exhaustively brainstorm and come up with resolutions that will form a robust template that will enhance the nation’s economy.
