The tax reform policy has been a debate that remained on the front burners of national discourse for obvious reasons. For the government, it is a policy that will bring in more revenue into its coffers; for the payee, it is one that will take out more money from his pocket.
However, the government, since its tax policy pronouncement, has embarked on a huge enlightenment campaign to sell the benefits in the reform policy to the public. In doing this, and owing to the quantum of the tax ‘business’ he now superintends, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has had to talk about it constantly to get the message across. ‘The Acts comprehensively overhaul the Nigerian tax landscape to drive economic growth, increase revenue generation, improve the business environment and enhance effective tax administration across the different levels of government.’
Yet, the government may have also found a way of mitigating the likely burden this policy may have on her people. For instance, there is a provision for an exemption of manufacturers and farmers from paying withholding tax as a way of reducing the tax burden on businesses.
‘We want to reduce the burden on businesses, promote competitiveness, equity and ease of compliance and tax avoidance, detect tax evasion and reflect what is happening globally. We are creating an exemption for withholding tax small businesses and what we have in mind is N50 million. We have reduced the rate for real businesses to as low as two per cent- people producing goods and services because the margins are very small. We have created an exemption for manufacturers- so if you are a manufacturer, don’t worry about withholding tax. If you provide input to manufacturers like farmers, don’t worry about withholding tax,’ Oyedele had explained at a forum in June 2024.
But this exemption may after all have to be taken over by some other categories of workers or ‘producers.’ Last week, Oyedele, during a tax education session in Lagos, made a pronouncement that has kept the cyber space buzzing with his declaration that from January 2026, the income of ‘runs girls’ would be subject to taxation. His logic, delivered during a tax education session at a Lagos church, was starkly legalistic, deliberately divorced from moral judgment: ‘If somebody is doing runs girls, right, they go and look for men to sleep with, you know that’s a service, they will pay tax on it. One thing about the tax law is it does not separate between whether what you are doing is legitimate or not. It just asks you whether you have an income.’
This announcement is a single, provocative thread in the ‘over 400 pages’ of what Oyedele calls ‘the most transformative, most significant tax reforms in our nation’s history.’ Yet, it has become the defining image of the new policy for many, a proverbial elephant that the public has latched onto.
A ‘runs girl’ is generally described as a woman, either single or married, who engages in relationships with multiple men for financial benefit. While some criticise this lifestyle as promiscuous, others see ‘run girls’ as resilient figures, adapting to economic challenges in their own way.
Burgeoning ‘runs girl’ industry
Curiously, the position of the tax man may have remained flabbergasting to several Nigerians, sparking discussions across the divide. But, a research survey conducted and circulated across the cyber space, may have given the government an idea of the ‘economic prosperity’ hidden away in the business- hence, its interest of getting its revenue cut from the commercial sex industry in the country.
A 2024 survey, widely circulated on social media, attempted to quantify this behemoth in Lagos State alone. The figures are nothing short of astronomical. The survey estimated that in 2024, men in Lagos spent a staggering N661billion to satisfy their sexual urges with commercial sex workers. Of this, N329 billion was paid directly to the women for their services, while the remaining N332 billion was spent on associated costs: lavish dinners, hotel rooms, gifts, drugs, and sexual enhancers. To put this in perspective, the proposed 2024 budget for the entire Nigerian Ministry of Health was roughly N1.1 trillion. The ‘runs girls’ economy in a single state is a significant fraction of the nation’s health budget.
A further breakdown of the demographics and economics of these revealed that of the 3.1 million sexually active men in Lagos, 1.86 million engaged in transactional sex. The average fee charged was N36,750, with premiums in affluent areas like Eti-Osa , encompassing Ikoyi and Victoria Island) reaching as high as N100,000 per transaction.
Crucially, the survey illuminated the profound economic ripple effect of this income, demonstrating that the N329 billion earned was not hoarded but actively and immediately injected back into the formal and informal economies. A significant portion, N93 billion, was cycled into the beauty and pharmaceutical sectors through spending on body and skin maintenance products. Furthermore, the industry served as a crucial source of financial support for extended families, with N62.5 billion sent home to relatives, while another N62.5 billion fueled commerce in clothing, accessories, real estate through rent, and the transportation industry. A surprisingly substantial N46 billion was directed into investments and speculative ventures like cryptocurrency, forex, and trading, highlighting a segment of workers actively seeking to build capital. Finally, underscoring their expenditure on personal well-being and advancement, N15 billion each was allocated to healthcare-covering antibiotics, supplements, and STD treatments-and education, for university programmes and other coursework.
This data paints a picture not of isolated, clandestine acts, but of a vibrant, high-value economic sector with deep interconnections to the mainstream economy. For a government struggling with revenue generation, this N329 billion pool of untaxed income represents a tantalising, if incredibly complex, prize.
Voices from the shadows
But Oyedele’s position on taxing ‘runs girl’ has been met with a mixture of disbelief, anger, and cynical amusement by the women it targets. For instance, a 24-year-old runs girl who operates in high-end hotels in Abuja, Amara (not real name), laughed hysterically when told about the policy.
‘Tax? On what? The money I use to treat my body and feed my family? Let me ask you, how will the taxman know how much I make? Will he be there in the hotel room to count the cash? Or will my ‘clients’ now ask for a receipt? This is just another way for them to harass poor people. The police are already collecting their own ‘tax’ by arresting us and demanding bail money. Now the Federal Inland Revenue Service (FIRS) wants its own share. They should go and tax the politicians first.’
Jennifer, a tertiary institution student in Lagos who says she engages in ‘runs’ to pay her tuition and support her younger siblings, expressed a more nuanced fear. ‘It’s not funny. They are saying this because they see us as easy targets. We are already stigmatised. If we try to comply, how do we do it? Do I walk into a tax office and say: ‘Hello, I am a prostitute, here is my tax’? They will arrest me on the spot. Or they will use the records to blackmail us. This policy is not well thought out. It’s like they want to drive us deeper into hiding.’
For Bimpe, a single mother of two in her 30s working the streets of Ikeja, the issue is one of basic survival. ‘My profit is what is left after I pay for my room, food, and my children’s school fees. There is no profit most months. If they take tax from the little I have, how will I survive? The government does nothing for me. No light, no good water, no security. Now they want to take from the little I hustle for with my own body. It is not fair.’
Global precedence
Nigeria is not the first country to grapple with the conundrum of taxing sex work, a challenge that forces a government to define its stance on legality, labour, and legitimacy. The relationship between sex work and the state can be distilled into a single, powerful transaction: the payment of tax. This exchange, or its absence, reveals whether a government views the worker as a criminal, a citizen, or something in between, creating a global patchwork of contradiction and obligation.
In Europe, the model is one of pragmatic integration. Germany’s foundational Act to Regulate the Legal Situation of Prostitutes (ProstG) of 2002 formally recognises sex workers as self-employed individuals. This status, governed by standard German tax law (EStG §4 and §), requires them to register a business, obtain a tax number, and file annual returns, allowing deductions for everything from professional attire to workplace rent. This framework grants access to social security and pensions, weaving the trade into the formal economy. A widely cited 2009 report by the German Institute for Economic Research (DIW Berlin) estimated the sector’s total economic contribution at over pound 6billion annually, a significant portion of which was taxable, despite ongoing challenges with full compliance.
Similarly, the Netherlands’ Lifting of the Brothel Ban Act (2000) allows workers in Amsterdam’s famed Red Light District to operate as independent entrepreneurs, leasing windows from the city and paying income tax. The goal is transparency, yet as reports from the Dutch Research and Documentation Centre (WODC) consistently document, the incentive to operate in the cash-based informal economy remains a persistent hurdle.
Moving beyond Europe, Australia offers a blueprint of assertive administrative oversight. In states where the trade is decriminalised, the Australian Taxation Office (ATO) leaves no room for ambiguity. Its ruling TR 2023/1 explicitly states that income from prostitution is assessable and must be declared, with clear guidelines on deductible expenses. Crucially, the ATO actively enforces this, using data-matching technology under its ‘Online entertainment industry data-matching programme’ to cross-reference escort website advertisements with tax returns, ensuring this recognised business pays its share.
In stark contrast stands the United States, where a deep philosophical paradox prevails. Prostitution is largely illegal, yet the Internal Revenue Service (IRS) mandates in its Publication 17 that all illegal income, including from sex work, is taxable. This principle was cemented by the 1927 Supreme Court case: United States v. Sullivan, which ruled that the Fifth Amendment does not excuse filing a tax return. The state effectively demands its share while denying the work’s legality, creating a catch-22 where compliance is virtually zero.
This American contradiction highlights a critical question for the Nigerian context: what happens in regions where the very concept of a ‘red light tax’ is unthinkable under the law? The broader African context provides a clear, sobering answer. No African nation has a formal system to tax sex workers as a legal profession. Instead, the continent showcases a spectrum of state interactions defined by exclusion and coercion, a reality Nigerians know all too well.
In countries like Kenya and Nigeria, where criminalisation is the norm, a perverse form of informal ‘taxation’ thrives. As documented in an Amnesty International Report (2020) on Kenya and a Human Rights Watch Report (2022) on Nigeria, police systematically extort bribes from sex workers, creating a corrupt levy that funds predation, not public services.
Senegal presents a unique, health-focused exception. Its legal framework allows regulated prostitution, requiring health cards and confining work to licensed brothels. However, analyses by the International Committee on the Rights of Sex Workers in Europe (ICRSE) and the International Alliance of Women (IAW) confirm this is a model of regulation, not fiscal integration; the state monitors bodies, but does not formally tax their income.
Most telling is South Africa’s landmark stance. In a historic move for rights-based policy, the 2023 Draft Sex Work Bill includes a clause (Section 17) that explicitly prohibits the South African Revenue Service (SARS) from taxing a sex worker’s income until the profession is fully decriminalised. It is a powerful statement of principle: no taxation without representation and protection.
Between pragmatism and peril
Economists, legal experts and social commentators in the country are divided on the feasibility and ethics of the proposal. A Lagos-based public finance economist, Dr. Oluwaseun Adebayo, sees logic in the move.
‘From a purely economic standpoint, the principle of horizontal equity in taxation demands that all income, regardless of source, should be taxed equally. This massive informal economy distorts the market and deprives the state of crucial revenue that could be used for public goods. The N329 billion figure, if even half of it is taxable, represents a significant revenue stream. The intent to broaden the tax base is correct. However, the ‘how’ is a nightmare. Without decriminalisation or a specific legal framework that protects these women and provides a clear mechanism for compliance, this is more of a philosophical statement than a practical policy.’
For the Founder and General Overseer of Calvary Bible Church, Dr. Olumide Emmanuel, the issue remains a paradox exposing the nation’s contradictions as ‘the most religious nation on earth’ and at the same time ‘the most corrupt, and the poorest.’
Dr. Emmanuel, who is also a wealth creation coach, acknowledged that N661 billion revenue generation in the ‘runs girl’ sector alone in Lagos state, if true, shows the economic reality and prosperity in the ‘sector.’ ‘That is obviously an industry; anything that is producing that kind of money is an industry you should put your eye into.’
He however said there is a need to draw the line of distinction between business and morality, given the sensitivity and wider implications on societal values. ‘There is a difference between legality and morality. We need to understand that. Everybody that is earning an income must be taxed. So legally, yeah, if you make income, you should be taxed. There’s nothing legally wrong in that.’
‘But morally, what that now means is that we are legalising prostitution from the back door. It means that if I pay tax to you, then you cannot now come to me to say that the money I paid you, the source of the money is wrong. So, legally, it’s not wrong. You get income, you must be taxed. Morally, it’s disgusting,’ he concluded.
Yet, a human rights lawyer, Barrister Paul Mgbeoma, is concerned about the legal and safety implications.
‘Mr. Oyedele’s statement, while legally accurate in a narrow sense, is dangerously simplistic. It ignores the fact that these women are operating in a criminalised environment. Forcing them to declare their income for tax purposes is essentially asking them to self-incriminate. It could provide a new tool for law enforcement to extort and abuse them. The state cannot have it both ways. It cannot criminalise an activity on one hand and demand its fair share of the profits on the other. The first step must be a national conversation about decriminalisation or legalization, to ensure the safety and rights of the workers, after which taxation becomes a straightforward administrative process.’
Still, Pastor Best Ezeani of the Redeem Christian Church of God offers a moral and religious perspective.
‘As a man of God, I must state unequivocally that the church condemns sin in all its forms, and prostitution is a sin. However, the role of the government is governance, not morality. While we preach repentance and a change of life to these women, the government has a duty to manage the state’s finances. If the law says all income is taxable, then so be it. Perhaps this could even serve as a deterrent. But the government must be careful not to appear to be endorsing or profiting from sin. The focus should be on creating legitimate jobs and fostering moral rearmament.’
An Islamic Scholar in Lagos, Imam Sani Abdulaziz, shares a similar moral concern. ‘In Islam, this profession is strictly forbidden (Haram). To now formalise it through taxation is deeply troubling. It gives it a semblance of legitimacy that is against our religious tenets. The government should be focusing on empowering youth and women through halal means and strengthening family values, not finding ways to tax immoral earnings.’
The Challenge
The chasm between Oyedele’s legal pronouncement and its practical execution is vast, raising the critical question of how the Federal Inland Revenue Service (FIRS) could possibly operationalise this policy. The first and most fundamental hurdle, according to Mgbeoma is assessment and declaration: ‘Would sex workers be expected to formally file annual tax returns, declaring their gross income and then itemising deductible business expenses such as condoms, outfits, and hotel costs?’
This scenario, he said, seems fanciful, if not entirely absurd, within a context defined by widespread social stigma and active criminalisation of their profession.
‘Enforcement presents another monumental challenge; the notion of FIRS tax auditors being deployed to brothels and nightclubs is not only logistically implausible but also risks catastrophic clashes with law enforcement and would inevitably create new, vicious forms of extortion. Furthermore, while a small segment of high-end workers may leave a digital trail through online advertising and bank transfers, the overwhelming majority of transactions are conducted in untraceable cash, making any systematic tracking of income nearly impossible.
‘Finally, the alternative of shifting the tax burden to the clients-treating them as withholding agents-would be equally unenforceable and absurd, completing a picture of a policy that is conceptually straightforward but practically a minefield,’ he added.
Oyedele himself has urged Nigerians not to focus solely on this one issue, comparing it to the parable of the blind men and the elephant. He emphasises the broader, progressive goals of the reform: simplifying the tax system, exempting low-income earners and ending multiple taxations. Yet, it is this very ‘runs girl’ comment that has captured the public imagination, symbolising the reform’s ambitious attempt to drag the entire informal economy into the tax net.
Reflections
A public policy analyst, Mayowa Sodipo, may have summed up the diverse submissions of stakeholders’ views, especially the ‘paradoxical’ position submission of Dr. Emmanuel. He argued that contemplating taxing ‘runs girls’ is a stark reflection of the country’s enduring contradictions- a deeply religious society with a sprawling informal economy; a state with ambitious revenue targets but weak institutional capacity; a legal system that criminalises an activity whose economic contribution it now seeks to harness.
For the women like Amara, Jennifer and Bimpe, the taxman’s announcement is just another potential predator in a landscape already filled with danger. It underscores their precarious position-exploited by clients, harassed by police, judged by society, and now pursued by the treasury, all while being denied the basic protections and recognition afforded other workers.
The path forward is fraught. The German model of legalisation and regulation, according to experts, offers a pragmatic blueprint for successful taxation but would require a seismic shift in Nigeria’s social and legal fabric. As the nation grapples with this controversial proposal, the story of the ‘runs girl’ and the taxman has become a powerful allegory for the country’s struggle to reconcile its morals with its money.