By Ogunwoye Gbemiga Ogunwoye (OGS)
The Federal Inland Revenue Service (FIRS) under the leadership of Executive Chairman Zach Adedeji, has undeniably made significant strides in revenue generation for the Nigerian government.
While these achievements are being lauded as a win for national development and fiscal stability, a growing chorus of voices is raising concerns about the methods employed, arguing that the increased tax burden and the perceived lack of people-centric processes are placing undue strain on already struggling citizens.
The core principle that technology and process improvements should serve the populace, not annihilate them, appears to be increasingly overlooked in the pursuit of revenue targets.
Since assuming office, Zach Adedeji has spearheaded an aggressive revenue drive, leveraging technology and process optimization to broaden the tax net and improve collection efficiency. The FIRS reported a record-breaking N12.37 trillion in tax revenue in 2023, a substantial increase from previous years, and projections for 2024 and 2025 indicate continued growth.
This surge in revenue is critical for the government to fund infrastructure projects, social programs, and reduce reliance on volatile oil revenues. Adedeji himself has emphasized the importance of a robust tax system for national self-sufficiency and sustainable development.
The FIRS has introduced various digital initiatives, including enhanced e-filing platforms, automated tax compliance checks, and data analytics to identify non-compliant taxpayers. These technological advancements have undoubtedly streamlined tax administration and reduced opportunities for evasion.
Despite the government’s celebratory tone, the reality on the ground for many Nigerians is starkly different. The increased tax burden comes at a time when the economy is far from friendly to the masses.
Fuel subsidy removal and the devaluation of the Naira have further exacerbated these economic woes, leading to a significant increase in the cost of living. In this environment, aggressive tax enforcement, even if technically justified, feels punitive to citizens already struggling to make ends meet. Small and medium-sized enterprises (SMEs), often considered the backbone of the economy, are particularly vulnerable, facing increased operational costs and reduced consumer spending, making compliance with new tax regimes a significant challenge. Many businesses report that the FIRS’s intensified efforts, while aimed at improving compliance, often translate into arbitrary assessments and a lack of understanding of their unique operational challenges.
The current economic climate dictates that the government must exercise caution to avoid overstretching the populace. While revenue generation is vital for national development, it should not come at the expense of the citizens’ well-being. There is a growing sentiment that the government’s focus on revenue targets overshadows the socio-economic realities faced by ordinary Nigerians. Experts suggest that a more balanced approach is needed, one that combines robust tax administration with policies aimed at stimulating economic growth, creating jobs, and alleviating poverty. This could include targeted tax incentives for struggling sectors, a review of existing tax policies to ensure fairness and equity, and a greater emphasis on public spending that directly benefits the masses, such as investments in education, healthcare, and social safety nets. The long-term sustainability of any tax system relies on the trust and cooperation of its citizens, which can be eroded if the burden becomes unbearable. The government and FIRS must recognize that while they celebrate their fiscal achievements, the true measure of success lies in the positive impact on the lives of all Nigerians, not just the national treasury.
A particularly striking example of the burden on the masses is the current state of air travel within Nigeria. Once a relatively accessible mode of transportation for a broader segment of the population, air travel has now become almost exclusively the preserve of the super-rich due to exorbitant ticket prices, largely driven by increased taxes and levies on airlines and passengers.
The Air Transport Services Senior Staff Association of Nigeria (ATSSSAN) and the National Union of Air Transport Employees (NUATE) have repeatedly highlighted the detrimental impact of these taxes on the aviation sector and the traveling public. President of the Aircraft Owners and Pilots Association, Dr Alex Nwuba, has called on the federal government to overhaul Nigeria’s aviation cost structure, warning that excessive charges and taxes are ultimately passed on to passengers.
In an interview with ARISE News, Nwuba highlighted that over 70% of the cost of an airline ticket comes from fees and taxes, with airfare itself representing only a small portion. The cumulative effect of aviation fuel costs, airport taxes, and other regulatory charges has pushed airfares beyond the reach of the average Nigerian, effectively limiting mobility and hindering economic integration within the country. This situation starkly illustrates how government policies, while aiming to boost revenue, can inadvertently create barriers and deepen inequality.
The telecommunications sector, a vital artery of modern Nigerian life, has been particularly hard hit by these tax increases. Consumers are now contending with higher costs for calls, data, and other services due to a combination of factors. The implementation of a 5% excise duty on telecommunication services, which was initially proposed and later implemented, has directly translated into increased charges for subscribers. This excise duty is levied on the service providers, who then pass on the cost to the end-users, leading to a direct increase in the price of airtime and data bundles.
Another significant contributors to the current economic hardship is the continuous increase in electricity tariffs. The Nigerian Electricity Regulatory Commission (NERC) has approved several tariff hikes, with the most recent adjustments significantly raising the cost of electricity for both residential and commercial users. For instance, the average tariff for Band A customers (those receiving 20 hours or more of electricity daily) has seen substantial increases, impacting businesses that rely heavily on consistent power supply and households already struggling with other expenses. Many Nigerians report that despite these tariff increases, the quality and availability of electricity remain poor, leading to reliance on expensive alternative power sources like generators, further exacerbating their financial woes. The cost of running a small business, for example, is now significantly higher due to the combined effect of increased electricity bills and the cost of fuel for generators during outages.
Furthermore, the existing VAT rate of 7.5% on telecommunication services, coupled with other levies such as the National Information Technology Development Agency (NITDA) levy and the annual operating levy paid to the Nigerian Communications Commission (NCC) creates a significant tax burden on operators. These costs are ultimately factored into the pricing of services, making communication more expensive for the average Nigerian. Industry experts have warned that these escalating charges could lead to a decline in teledensity and internet penetration, hindering digital inclusion efforts and economic growth.
For the typical Nigerian household, the impact of increased taxation is felt directly through a higher cost of living. The recent upward review of Value Added Tax (VAT) from 7.5% to 10% (effective January 1, 2025, as per the Finance Act 2024) has led to a noticeable increase in the prices of goods and services, from everyday consumables to essential utilities. This is compounded by existing levies and duties on imported goods, which further inflate prices in a country heavily reliant on imports.
While acknowledging the inherited economic challenges, including a substantial national debt (which stood at approximately N121.67 trillion as of September 2025), and the need for fiscal responsibility, there is a strong consensus that the burden of economic recovery should not fall solely on the shoulders of ordinary Nigerians who have seen little benefit from past economic booms.
Experts and civil society organizations are advocating for a more progressive tax system, where those with higher incomes and greater wealth contribute a proportionally larger share.
This could involve more effective taxation of luxury goods, capital gains, and a more rigorous approach to collecting taxes from large corporations and high-net-worth individuals who often exploit loopholes.
Furthermore, there is a pressing need for greater transparency and accountability in the utilization of tax revenues. Many Nigerians express skepticism about how their tax money is being spent, citing persistent issues of corruption and inadequate public services despite increased revenue generation. Building public trust through visible improvements in infrastructure, healthcare, education, and other essential services is crucial to fostering a culture of tax compliance and ensuring that citizens feel their contributions are genuinely benefiting the nation.
A worthy point of contention is the comparison between Nigeria and other tax-dependent economies. Many countries with high tax rates, such as those in Scandinavia or Western Europe, often have fewer natural resources but boast robust social welfare systems, efficient public services, and high standards of living, directly attributable to their tax contributions. In contrast, despite Nigeria’s vast oil wealth and other natural endowments, the average citizen often experiences inadequate infrastructure, poor healthcare, and a struggling education system. The perception is that the benefits of taxation are not equitably distributed or transparently utilized, leading to a lack of trust and willingness to comply.
The argument is not against taxation itself, but against the perceived inequity and the lack of tangible returns for the taxpayer. The current approach, many argue, places an undue burden on those who have historically received minimal benefits from the state, while systemic issues of corruption and inefficiency in public spending persist.
The core philosophy behind implementing advanced processes and technology should be to enhance efficiency and ease for the end-user – in this case, the taxpayer. While the FIRS has adopted sophisticated tools, the perception among the populace is that these tools are primarily used for enforcement and collection, rather than for facilitating a smoother, less burdensome tax experience. For example, the automation of tax filing and payment systems, while technically efficient, does not address the fundamental issue of affordability for those whose incomes are stagnant or declining.
There is a critical need for a more people-centric approach, where technology is leveraged to simplify tax laws, provide clear guidance, and offer support to taxpayers, especially those in the informal sector who may lack the resources or understanding to navigate complex digital platforms.
The FIRS could explore initiatives such as simplified tax regimes for micro-businesses, accessible digital literacy programs for taxpayers, and a more robust feedback mechanism to address concerns about tax assessments and processes.
