Senator representing Imo West (Orlu), Osita Izunaso, has warned that Nigeria’s new tax reforms may fail to achieve their objectives unless increased tax revenues are matched by improved public services, transparency and accountability.
Izunaso said Nigerians could not be expected to embrace higher tax obligations without seeing a clear connection between the taxes they pay and the roads, schools, hospitals, security and other public services provided by government.
He spoke at the ongoing Nigerian Bar Association (NBA) Annual General Conference in Port Harcourt, Rivers State, during a session themed: ‘Pay now, prosper later: Making Nigeria’s new tax reforms work in practice.’
The senator said the success of the reforms would depend less on the passage of the new laws than on how effectively and fairly they were implemented.
He said the ‘prosper later’ component of the reforms must be demonstrated through visible development and improved living conditions, rather than remain a mere political slogan.
‘Government cannot simply say to Nigerians, ‘Pay your taxes.’ Government must also demonstrate, ‘This is what we are doing with your taxes,” Izunaso said.
According to him, taxation should be viewed as a social contract between citizens and government, under which citizens contribute part of their income with the expectation that government will deploy the resources responsibly for the common good.
He said increased revenue should therefore translate into productive investment, better public services, job creation and an environment conducive to business growth.
Izunaso urged government to strengthen monitoring of public expenditure, reduce waste, improve transparency in procurement and tackle corruption to build confidence in the tax system.
He said public trust was critical to achieving voluntary compliance, warning that citizens would be reluctant to pay taxes if they believed the resources were being wasted or mismanaged.
The senator said the reforms should establish a tax system that was simpler, fairer, transparent and easier to administer, rather than merely provide government with additional revenue.
He identified harmonisation of the tax framework, reduction of multiplicity and duplication, improved compliance and modernisation of tax administration as key objectives.
Izunaso said the tax burden must also reflect taxpayers’ capacity, with low-income Nigerians and small businesses protected from excessive burdens while individuals and businesses with greater economic capacity make a fair contribution.
‘The principle should be straightforward: everybody should contribute according to the law and according to their capacity, but nobody should be subjected to an arbitrary or unnecessarily burdensome tax system,’ he said.
He identified taxpayer education and mass sensitisation as priorities, saying citizens could not be expected to comply voluntarily with laws they did not understand.
He called for a sustained national campaign explaining, in simple language, who is liable to pay tax, applicable deductions and exemptions, VAT obligations, tax identification requirements, filing deadlines and taxpayers’ rights.
Such campaigns, he said, should extend beyond Abuja and major cities to markets, artisans, farmers, small and medium-sized enterprises, professionals, employees and operators in the informal sector.
He urged the authorities to use radio, television, social media, community organisations, traditional institutions and religious bodies, including communication in major Nigerian languages.
Izunaso also called for a tax administration system in which compliance was easier than non-compliance.
He said taxpayers should not need to hire professionals simply to understand basic tax obligations, urging authorities to simplify registration, filing, payment, invoicing and record-keeping through digital platforms.
‘Technology must be used not merely to collect more data, but to reduce the cost and inconvenience of compliance,’ he said.
He called for simple digital tools, clear guidance, standard templates and accessible help desks for taxpayers.
On enforcement, the senator said tax administration must be based on certainty, consistency and fairness.
He urged revenue authorities to distinguish between genuine mistakes and deliberate tax evasion, saying honest errors should attract education and correction while fraud and intentional evasion should be punished.
He warned that arbitrary assessments, harassment and inconsistent enforcement could erode public confidence and discourage compliance.
Izunaso also advocated a stronger taxpayer-rights regime, including clear assessment procedures, timely dispute resolution and effective channels for complaints.
He described the establishment of the office of the tax ombudsman as ‘a step in the right direction’, but said government must ensure that taxpayers’ rights were protected throughout the administration and enforcement process.
On the informal sector, the senator urged government to use incentives rather than intimidation to bring businesses into the formal tax system.
He said millions of Nigerians operating small and informal businesses might be willing to contribute but were discouraged by complexity, inadequate information and multiple government levies.
He advocated simplified registration and taxation, coupled with tangible benefits for formal businesses, including access to government programmes, public procurement opportunities, finance and other services.
Izunaso also warned against imposing excessive compliance costs on small and medium-sized enterprises, saying the tax system should support rather than undermine productive enterprise and job creation.
He said provisions creating unnecessary burdens or ambiguities should be reviewed through the appropriate legislative process.
The senator further urged the NBA to play an active role in the implementation of the reforms, saying lawyers were not only advisers to taxpayers but also officers of the law and important stakeholders in public policy.
He said the NBA could support tax education and continued engagement with taxpayers as the new framework moved from legislation to implementation.
Izunaso said the credibility of the reforms would ultimately be determined by whether Nigerians could see a credible link between taxation and development.
He said: ‘The ‘prosper later’ part cannot remain a slogan. Government must demonstrate that additional revenue is being translated into productive investment, better public services, job creation and an environment conducive to business growth.’