Barely weeks into the implementation of Nigeria’s new tax regime, a familiar anxiety is resurfacing among citizens: not whether taxes should be paid, but whether the proceeds will be properly used.
BusinessDay reported that from urban professionals to informal traders, conversations increasingly return to the same question: what will the Federal Government and the states do with the billions of naira expected to flow in under the new tax framework?
The goal of the new tax regime is not to squeeze more money out of a struggling population but to restructure the system to support growth, inclusion and shared prosperity, Taiwo Oyedele, chairman of the Presidential Fiscal Policy and Tax Reforms Committee, has consistently argued.
“The whole idea is to try and promote economic growth, inclusivity, as well as shared prosperity for our people,” he said.
For many Nigerians, distrust of public finance management remains the single biggest obstacle to tax compliance. Years of unfulfilled promises, decaying infrastructure and poor social services have created a perception that taxes disappear into government coffers without tangible impact on daily life.
“Government always talks about revenue, but we don’t see results,” said Abdullahi Oladele, a Lagos-based worker. “Roads are bad, hospitals are empty, schools are struggling. If we pay more tax, what changes?”
That sentiment is widespread. Over the years, citizens have repeatedly cited fear of mismanagement and corruption as justification for resistance to taxation. Many believe funds meant for public good are routinely diverted, reinforcing skepticism about new revenue drives.
The concern is particularly pronounced at the subnational level, where a larger share of tax revenue is headed. Under the new National Tax Acts, the federal government’s share of value-added tax (VAT) will drop from 15 percent to 10 percent. States will see their share rise from 50 percent to 55 percent, while local governments retain 35 percent.
Beyond VAT, Pay-As-You-Earn (PAYE) tax, a major revenue source controlled entirely by state governments, is also expected to rise as the new regime expands the tax net, especially within the informal sector.
“What worries me is not just paying tax, but who controls it,” said Olawunmi Olaitan, a public servant. “States are getting more money, but will this translate to better healthcare, education and infrastructure, or will it disappear like previous funds?”
The reference point for many is the fuel subsidy removal of 2023. At the time, government assured Nigerians that savings from subsidy removal would boost development spending and improve living standards. Instead, while states received significantly higher allocations from the Federation Account Allocation Committee (FAAC), many citizens say the impact on their lives has been minimal.
“The subsidy money came, allocations increased, but poverty increased,” Olaitan said. “Now they want more tax. We are afraid it will end the same way.”
Civil society groups argue that this fear is justified by history. They point to weak transparency mechanisms at the state level and limited public access to budget implementation data.
“Most states do not clearly show how internally generated revenue or federal allocations are spent,” said a public affairs analyst who spoke on condition of anonymity. “Without openness, trust cannot grow, and without trust, tax compliance will always be forced rather than voluntary.”
Beyond service delivery, there is also concern about Nigeria’s growing debt burden. Citizens worry that instead of reducing borrowing, new tax revenues could simply create room for more loans.
Some analysts argue that the new tax regime presents an opportunity to reset the relationship between government and citizens, but only if accountability is prioritised.
“The reform is not just about collecting more money,” the analyst said. “It is about showing Nigerians that taxes can work. That means visible projects, measurable outcomes and regular public reporting.”
There are also calls for stronger legislative oversight and citizen engagement at the state level. Budget tracking, community monitoring of projects and transparent procurement processes are increasingly seen as essential to rebuilding trust.
For young Nigerians, the issue is deeply personal. Many feel overburdened by rising living costs and shrinking opportunities, making the idea of higher compliance without clear benefits difficult to accept.
“If they show us where the money goes, people will pay,” said Samuel Adewole, a freelance designer. “But if it’s just another money for politicians, then resentment will grow.”
Expectations are high and patience is thin. Nigerians are not rejecting taxation outright; rather, they are demanding value, accountability and honesty.
The message from the streets is clear: if the new tax revenues are deployed transparently to improve lives, trust may slowly return. But if they mirror the subsidy windfall, heavy on promises, light on impact, the credibility of fiscal reform may suffer long-term damage.
