As Tinubu insists reforms will continue, Obi raises concerns over fairness, transparency, and alleged manipulation of new tax legislation
Former Labour Party presidential candidate and ex-Anambra State governor, Peter Obi, has criticised Nigeria’s existing tax framework, warning that no nation can achieve real prosperity by placing heavier financial burdens on its poorest citizens.
Obi, who recently defected to the African Democratic Congress (ADC), expressed his concerns in a post on X (formerly Twitter) on Friday, where he questioned the philosophy behind the country’s tax policies and called for a more transparent, fair, and people-focused approach to taxation.
According to Obi, sustainable economic growth begins with national consensus and trust between citizens and those in power.
“Prosperity cannot come by taxing poverty,” he wrote. “From my engagements with leaders across the world who have successfully transformed their countries, one lesson stands out clearly: lasting progress starts with shared understanding and honesty.”
He argued that leadership must be anchored on integrity, stressing that governments owe citizens transparency and accountability.
“True leadership is not about exploiting citizens to enrich a few cronies. It is about building trust, unity, and a shared sense of purpose, the very foundation of sustainable development,” Obi stated.
Concerns Over Nigeria’s Tax Framework
Obi maintained that Nigeria’s current tax structure does not meet these principles, noting that taxation should function as a genuine social contract between the state and its people.
He said every tax policy must be clearly communicated, including how it affects incomes and how the revenue will translate into tangible national development.
“Citizens are being asked to pay taxes without proper explanations or visible benefits. This erodes trust, weakens unity, and ultimately slows economic growth,” he warned.
The former governor also stressed the importance of empowering small and medium-sized enterprises (SMEs), describing production not excessive taxation as the true engine of economic growth.
“You cannot tax your way out of poverty. You must produce your way out of it,” Obi said, explaining that thriving businesses naturally expand the tax base by creating jobs and raising incomes.
Allegation of Forged Tax Law
Obi further raised alarm over what he described as an unprecedented controversy surrounding Nigeria’s new tax legislation. He alleged that the tax law signed into effect had been manipulated.
“For the first time in our history, a tax law has reportedly been forged. Even the National Assembly has admitted that the version gazetted is different from what was passed,” he claimed.
He warned that Nigerians are being asked to pay higher taxes under a framework he believes lacks transparency and legal legitimacy, calling for a lawful, fair, and people-centred tax system that protects the vulnerable and restores public confidence.
Government Pushes Back
Meanwhile, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has moved to address public concerns, insisting that the new tax laws do not allow for automatic deductions from personal bank accounts.
Oyedele clarified that individuals will not be required to provide narrations or explanations for bank transfers, describing the reforms as straightforward and transparent.
Earlier in the week, President Bola Tinubu reaffirmed that the implementation of the tax reforms would proceed as planned, despite objections from opposition figures, labour unions, and other stakeholders.
The president, who signed four new tax bills into law in June 2025, said the reforms are not designed to increase taxes but to reset Nigeria’s fiscal structure, promote harmonisation, protect citizens’ dignity, and strengthen the social contract.
“This is a once-in-a-generation opportunity to build a fair, competitive, and resilient fiscal foundation for Nigeria,” Tinubu said.
Key Provisions of the Tax Reforms
The new tax laws aim to simplify Nigeria’s tax system, widen the tax base, and shield low-income earners and small businesses. Highlights include:
- Full personal income tax exemption for individuals earning ₦800,000 or less annually
- Progressive tax rates capped at 25% for higher earners
- Small businesses with turnovers below ₦100 million exempt from company income tax, VAT, and the development levy
- Corporate tax for large firms reduced from 30% to 25%
- VAT retained at 7.5%, with exemptions for essential goods and services
- Centralised revenue collection under the Nigeria Revenue Service
The government has also assured Nigerians that exemptions cover minimum wage earners, pensioners, gifts, remittances, and diaspora income, insisting that ordinary citizens will not face additional tax pressure.
Despite ongoing legal challenges and public debate, authorities say the reforms are designed to support businesses, encourage growth, and create a fairer and more transparent tax system.
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