NESG SURVEY FLAGS INFORMAL LEVIES, WEAK TAX TRUST

Barbara Bako, Abuja.

The Nigerian Economic Summit Group (NESG) has identified informal levies, concerns over tax fairness and poor visibility of tax-funded projects as major challenges undermining public confidence in Nigeria’s tax system.

The survey titled “The NESG Tax Perception Survey 2026”, was presented at a plenary event on the sidelines of the 32nd Nigerian Economic Summit on Tuesday in Abuja.

Finding from the report showed that although 74.4 per cent of households accepted the government’s right to collect taxes, trust in tax authorities remained weak, with an average score of 2.01 on a four-point scale.

It covered 18,000 households and 9,097 firms across the 36 states and the Federal Capital Territory (FCT), also found that 67.2 per cent of households had encountered informal, non-state levies at least once, while 13.9 per cent of firms reported being asked to pay fees they considered illegal.

The survey presentation also highlighted gaps in tax awareness, with 40 per cent of households described as moderately aware of the tax laws, compared with 80 per cent of firms reporting awareness.

It further identified uneven adoption of digital tax services, concerns about the fairness of tax burdens and limited use of accountability channels as areas requiring attention.

It suggested that improving compliance would require more than enforcement, with simpler procedures, clearer communication, fairer administration and visible public benefits needed to strengthen confidence in the system.

The findings were discussed during the plenary session titled Rethinking the Tax Contract: Building Trust, Fairness and Compliance, where panellists called for stronger accountability, simpler tax administration and a clearer link between revenue collection and public service delivery.

Olusegun Adesokan, Executive Secretary of the Joint Revenue Board, said the government was working towards a tax system guided by fairness, equity, accountability and transparency.

Adesokan said the reforms were intended to harmonise subnational taxes, reduce obstacles created by multiple levies and improve clarity for taxpayers.

He said 20 states had adopted the proposed harmonised tax framework, while the legislation was undergoing scrutiny in 17 other states.

Adesokan also highlighted the introduction of uniform presumptive tax regulations by the Minister of Finance, saying the framework was designed to promote consistency and fairness in the treatment of taxpayers across the country.

On institutional capacity, Adesokan said 15 of the 37 subnational tax authorities were fully autonomous, 15 were partially autonomous, while seven had no autonomy.

He said greater autonomy would enable tax authorities to recruit competent personnel and strengthen their capacity to administer taxes more effectively.

Vahyala Kwaga, Country Director of BudgIT, said governments needed to establish a stronger connection between budget performance and improvements in public services.

“Far too often, budgets appear to be target setting exercises,” Kwaga said, arguing that governments should assess public spending by its impact on communities rather than merely whether revenue and expenditure targets had been met.

He said citizens were more likely to trust the tax system when they could see how public revenue translated into better healthcare, education, infrastructure and other essential services.

Kwaga called for stronger citizen engagement in tax policy and accessible complaints mechanisms, including tax ombudsmen at the state level, to help resolve disputes between taxpayers and authorities.

He said governments should demonstrate how public feedback influenced decisions and ensure that lower-income citizens did not receive inferior public services simply because they paid less tax.

Kwaga also called for a fair fiscal exchange system that takes account of citizens’ different income levels and needs when governments distribute public services.

Yinka Babalola, Country Director of the International Budget Partnership, said Nigerians had not rejected taxation in principle but wanted government to demonstrate that the system was fair and that tax rules applied consistently.

“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 information on tax waivers, incentives and other tax benefits, alongside greater transparency about compliance among large taxpayers and high-net-worth individuals.

Babalola said visible evidence that wealthy individuals and large businesses were meeting their tax obligations would help address perceptions that some taxpayers were beyond the reach of the authorities.

He also called for stronger efforts to eliminate illegal and informal levies, warning that such practices could undermine public acceptance of tax reforms.

Babalola further advocated stronger tax dispute-resolution mechanisms and adequate funding for the tax ombudsman’s office to help strengthen confidence between taxpayers and government.

He said tax redress mechanisms should be accessible across states, adding that citizens needed effective channels to resolve complaints against tax authorities.

Bidemi Daniel Olumide, Chief Executive Officer of Taxaide and Taxtech, said Nigeria needed an integrated digital tax infrastructure connecting government platforms with the systems businesses used in their daily operations.

Olumide identified digital identity systems, electronic payments, tax returns platforms and electronic invoicing as important foundations for modern tax administration.

He said the next step was to develop common technical standards that would allow business systems to communicate seamlessly with government platforms while ensuring that taxpayer information was adequately protected.

Olumide said the proposed integration would make it easier for businesses to transact with government and enable taxpayers to see how taxes were administered.

He, however, cautioned that eliminating cash-based tax collection would require practical infrastructure for revenue officials operating in areas with limited digital access.

Olumide said revenue collectors should be equipped with point-of-sale devices integrated with government systems to make electronic payments practical and improve transparency.

The plenary concluded with calls for governments at all levels to improve transparency, strengthen institutional capacity and make taxpayer feedback and complaints mechanisms more accessible.