Nigeria’s fiscal debate is no longer about whether reforms are necessary. It is about whether the country can sustain them without falling back on the familiar comfort of borrowing.
That tension was evident in the remarks of the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, who said Nigeria cannot continue to finance development mainly through debt. His position is straightforward: the state must build a tax and revenue system strong enough to carry infrastructure, education, healthcare and security without constant external support.
He made the point in Abuja at the 28th Annual Tax Conference of the Chartered Institute of Taxation of Nigeria, where tax reform was presented not as policy fine-tuning, but as a survival tool for public finance.
“Nigeria cannot continue to finance development primarily through borrowing,” he said. “We must build a fiscal system capable of sustainably supporting critical infrastructure, quality education, affordable healthcare, security, and social protection.”
The statement lands at a sensitive moment. Only a day earlier, reports indicated that the Federal Government was engaging the World Bank for another $1.25bn loan to support reforms and job creation. It is the same contradiction that has followed Nigeria’s fiscal strategy for years: a stated desire to reduce debt dependence alongside continued reliance on external financing to plug development gaps.
Oyedele’s argument goes beyond revenue targets. It is about structure. Nigeria’s tax system, he said, still carries the weight of multiple taxation, fragmented administration and weak compliance, conditions that have made the system costly for businesses and difficult for government to enforce fairly.
“Businesses faced overlapping debts, unpredictable enforcements, and rising compliance costs,” he said.
The reform direction being pushed by government is meant to reset that structure. Low-income earners, especially those on minimum wage, have been removed from the personal income tax net, while relief has been extended to middle-income groups. Corporate tax adjustments are also under consideration, framed as a way of improving investment appeal in an economy that has struggled to attract and retain capital.
There is also a quieter but significant shift in consumption taxation. Changes to VAT rules are being designed to expand input credits and clarify exemptions on essential goods and services, a technical adjustment that carries broader implications for pricing, inflation and production costs.
Yet the more difficult battle sits outside the tax code itself. Nigeria’s problem has never been the absence of policy frameworks, but the difficulty of enforcement across multiple layers of government. Oyedele acknowledged this directly in his comments on tax harmonisation, noting that 15 states have already moved to align their tax structures with federal reforms, while others remain behind.
That uneven implementation is not a detail. It is the difference between a unified fiscal system and one that still operates as parallel revenue centres with competing incentives.
Digitalisation is being positioned as the corrective tool. Automation, data integration and electronic filing systems are expected to tighten compliance and reduce leakages. But technology alone does not resolve institutional capacity gaps or the deeper issue of trust between taxpayers and the state.
That trust deficit was indirectly acknowledged in the same discussions. Weak institutional capacity and low public confidence in tax administration continue to shape how reforms are received, especially in the informal sector where compliance is historically low and enforcement is difficult.
Vice-President Kashim Shettima, represented by Dr Tope Fasua, framed the reforms as part of a broader economic repositioning effort, aimed at improving competitiveness and expanding opportunity. But even within that framing, the challenge remains whether policy ambition can translate into consistent execution.
The President of the Chartered Institute of Taxation of Nigeria, Innocent Ohagwa, described the reforms as the most extensive overhaul in over three decades, linking them to the broader ambition of building a $1tn economy. That ambition, however, still rests on a more immediate question: how quickly Nigeria can move from a borrowing-dependent fiscal model to one that generates sufficient domestic revenue to sustain itself.
The argument against continued reliance on borrowing is not new. What is different now is that it is being made from inside the government at the same time fresh external financing is still being pursued. That overlap defines the current phase of Nigeria’s fiscal policy more than any reform document or conference speech.
