Tax law: Why rushing the reform in 2026 is a recipe for failure
The clock is ticking towards January 2026, the proposed start date for the nation’s new Tax Law. In the corridors of power, the focus seems fixed on the calendar. But in the marketplaces, homes, and businesses across the country, the focus is on survival. The current economic reality for millions of Nigerians is dire. Nigeria is curently a landscape of squeezed incomes, rising costs, and profound uncertainty. To insist on layering a major, complex tax reform onto this fragile foundation is not bold governance; it is a profound misjudgment of priority. This law is not a matter of urgent national need in its current state. The urgent need is to first get it right.
The very foundation of the law is cracked. Confusion already clouds its text due to discrepancies between the version passed by the legislature and the one subsequently gazetted. How can we build public trust or a functional system on an ambiguous legal base? This must be resolved before any talk of implementation, not discovered in the chaos of rollout.
But the problems run deeper than text. The government’s plan appears to be to legislate first and figure out the details later. This is a backward approach doomed to fail. True preparedness requires honest answers to critical, unresolved questions:
Firstly, the “How” is Missing. The integration of the National Identification Number (NIN) and Tax Identification Number (TIN) is touted as a cornerstone. Yet, the specific roles, technical interoperability, and data protection frameworks remain opaque. Simultaneously, there is a staggering lack of awareness among the very citizens and small businesses who will be most affected.
Implementing a law the public does not comprehend is a direct path to non-compliance and systemic failure. Success, therefore, is not a matter of enforcement but of understanding. Prior to rollout, the government must invest in a comprehensive, accessible, and empathetic public education campaign. To proceed without this foundational step would not only be counterproductive but would risk replacing voluntary compliance with widespread public alienation and costly coercion.
Secondly, the System is Not Ready. Our tax authorities face well-documented challenges in capacity, technology, and public trust. Asking them to execute a sweeping new regime without a significant, prior investment in their training, tools, and operational resilience is to set them up for failure. Furthermore, a “big bang” nationwide launch would overwhelm this system. A smarter strategy would be a phased, pilot introduction, starting in the commercial hearts of state capitals and the FCT , to test, learn, and adapt before scaling.
Most importantly, the “Why” is Unconvincing. Why should a public already burdened by economic hardship support this? Trust must be earned, not assumed. This requires absolute transparency on two fronts:
- Revenue Use: Citizens deserve a legislated framework that clearly dictates how every Naira collected will be spent. Will it fund tangible improvements in power, roads, healthcare, and education? The process for allocation and expenditure must be public, participatory, and subject to stringent independent audit.
- Direct Benefit: Where is the social contract? The government must concurrently design and communicate clear safety nets to cushion the initial impact. The long-term national benefits, from improved infrastructure to reduced borrowing, must be convincingly articulated to transform public perception from seeing a burden to understanding an investment in national development.
Finally, in a globalized economy, the role of multinational corporations and foreign actors must be clearly defined to ensure fairness and prevent the burden from falling disproportionately on domestic businesses and employees.
The ambition for a modernized tax system is not wrong. It is, in fact, necessary for long-term national development. But the timing and method are everything. Rushing to meet an arbitrary January 2026 deadline while ignoring these foundational gaps would undermine revenue goals, erode public trust, and destabilize an already struggling economy.
The government has a choice: it can plow ahead on a shaky foundation for a short-term doubtful political “win”, or it can pause, listen, and build a robust, transparent, and fair system that earns the people’s buy-in. True leadership lies in having the courage to say, “This is too important to get wrong. Let’s take the time to build it properly.” The nation’s economic stability and social cohesion depend on choosing the latter path. The Tax Law can wait; getting it right cannot.
