Nigeria’s proposed tax reforms have ignited an intense national debate, drawing sharp and often conflicting reactions from academics, industry leaders, policy advisers, and public commentators over whether the measures will strengthen the economy or deepen existing hardships.

The controversy was rekindled following comments attributed to the Chairman of Air Peace Airline, Dr Allen Onyewa, who warned that the implementation of the reforms could cause the economy to “crumble.” Reacting to the statement, Dr. Yemisi Ayinde, a researcher at Covenant University, Otta Ogun State told Nigerian Tribune that such a warning from a major industry player raised serious concerns about the intent, design, and preparedness behind the reform agenda.

“In all honesty and sincerity, for the Chairman of Air Peace Airline to publicly state that the implementation of the tax reform would cause the economy to crumble raises serious concerns about the quality and intent of the tax reform itself,” Ayinde said. “The very essence of any meaningful tax reform is to strengthen the economy, not weaken it; to support businesses, not suffocate them.”

Ayinde argued that if key sectors perceive the reforms as existential threats, it suggests inadequate consultation, weak impact analysis, and a failure to appreciate the realities of operating businesses in Nigeria. He called for a reassessment of the reforms and urged the Federal Government to pause the planned implementation to allow deeper stakeholder engagement and gradual, more thoughtful execution.

“True reform is not about imposing heavier pressure, but about creating a balanced system that benefits government, businesses, and citizens alike,” he said.

Constitutional safeguards vs practical reality

Not all analysts share Ayinde’s concerns. Former Director-General of the Debt Management Office (DMO), Dr Abraham Nwankwo, dismissed fears surrounding tax utilisation and accountability, insisting that Nigeria’s constitutional framework already provides sufficient safeguards.

According to Nwankwo, taxes collected by the Federal Inland Revenue Service (FIRS) and Nigeria Revenue Service (NRS) are paid into the Federation Account and shared among federal, state, and local governments through the Federation Account Allocation Committee (FAAC), while oversight institutions such as the Office of the Accountant-General, Auditor-General, National Assembly, judiciary, EFCC, and ICPC exist to ensure accountability.

“Please, let’s stop worrying about the allocation, utilisation, and accountability of taxes. They have been adequately taken care of by the Constitution,” Nwankwo said, adding that weaknesses in enforcement should be addressed through legislative action rather than resistance to reform.

However, critics argue that while safeguards exist “in theory,” their practical effectiveness remains doubtful, citing the persistent gap between public revenue inflows and tangible improvements in infrastructure and welfare.

Professionals, corruption, and public trust

In a more scathing critique, Dr. Christopher Osega Otubo and other commentators questioned the moral basis of tax expansion in an environment plagued by corruption and weak accountability. Otubo argued that any credible tax law must clearly spell out how revenues will be spent and impose penalties on government officials who misuse public funds.

“It shouldn’t be only about penalties for failure to pay taxes,” Otubo said. “There should also be penalties on the government at all levels for failure to judiciously use the taxes collected.”

Another commentator, writing under the name JOKA, described Nigeria’s tax reform as “the illusion of taxing the rich,” arguing that taxes imposed on corporations and wealthy individuals are inevitably passed down to ordinary Nigerians through higher prices, service charges, and inflation.

Aviation and banking as case studies

JOKA pointed to the aviation industry, where more than half of airfare costs are already tax-related, and the banking sector, where compliance costs translate into higher transaction fees and lending rates. According to him, the reforms mirror the subsidy removal episode—well-intentioned in theory but disproportionately harmful to the poor and middle class.

“Corporations do not absorb taxes; they recover them,” he wrote. “What appears as a tax on the rich is, in reality, a hidden tax on households.”

‘Reforms will help, not hurt’

In response, the Presidential Fiscal Policy and Tax Reforms Committee rejected claims that the new tax laws would cripple the aviation sector. In a detailed statement, the committee insisted that the reforms are designed to reduce, not increase, airline costs.

Key highlights include the removal of the 10 per cent withholding tax on aircraft leases, full VAT neutrality with guaranteed refunds within 30 days, retention of import duty exemptions on aircraft and spare parts, a proposed reduction in corporate income tax from 30 to 25 per cent, and harmonisation of multiple levies into a single development levy.

“The new tax laws are not the problem; they are a critical part of the solution,” the committee stated, adding that ongoing engagement with industry stakeholders would resolve remaining non-tax issues.

Taxing wealth or taxing households?

Several scholars remain unconvinced that the reforms are genuinely about taxing the wealthy. One academic noted that true wealth taxation would involve capital gains taxes, inheritance taxes, luxury consumption taxes, and net wealth taxes—tools that directly target high-value assets rather than businesses whose costs are passed on to consumers.

Economist Professor Silvanus Ikhide, however, offered a more measured view, acknowledging imperfections in the reforms but arguing that they would improve revenue mobilisation and support growth, particularly through exemptions designed to protect low-income earners.

Similarly, Presidential Adviser on Economic Affairs, Tope Fasua, insisted that the Tinubu administration is not seeking to tax ordinary Nigerians more heavily but to bring high-income individuals operating “below the radar” into the tax net.

“For the remaining working population, their tax liabilities actually fall,” Fasua said. “The elite consensus we need is that everyone must hold up their own end of the deal.”

A crisis of confidence

Despite official assurances, public sentiment remains deeply sceptical. Many Nigerians point to deteriorating infrastructure, insecurity, and what they perceive as extravagant government spending without transparency as reasons for their resistance to higher taxes.

“The lifestyle of people in government has eroded trust,” said one commentator. “I drive on bad roads, pay for security, electricity, and water myself—so the mention of tax is offensive.”

As Nigeria presses ahead with its tax reform agenda, the debate underscores a deeper and unresolved question: can taxation succeed in a climate of weak trust, perceived impunity, and fragile accountability? For many Nigerians, the answer may determine not only the fate of the reforms but also their faith in the social contract itself.

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