By Emmanuel Oladipo
The controversy surrounding Nigeria’s recently enacted Tax Reform Acts has become more than a debate about fiscal policy. It has evolved into a critical examination of the credibility, transparency, and constitutional integrity of the nation’s lawmaking process. At the centre of this storm is a firm intervention by the Nigerian Bar Association (NBA), led by its President, Mazi Afam Osigwe, SAN, warning that the sanctity of Nigeria’s legislative procedure may have been compromised.
This intervention is significant not merely because it comes from the country’s foremost professional legal body, but because it raises fundamental questions about governance, rule of law, and economic stability at a time Nigeria can least afford institutional uncertainty.
Reforms with Far-Reaching Implications
The Tax Reform Acts signed into law in 2025 represent the most ambitious overhaul of Nigeria’s tax framework in decades. They consolidate multiple tax statutes, restructure revenue institutions, expand the tax base to cover digital and emerging sectors, and seek to improve efficiency through technology and unified administration.
Government officials have projected that the reforms could significantly boost Nigeria’s tax-to-GDP ratio, which currently stands at about 10–11%, one of the lowest globally, compared to 18–20% in peer African economies and over 30% in many OECD countries. With Nigeria’s public debt exceeding ₦97 trillion and debt servicing consuming more than 60% of federal revenue, fiscal reform is widely seen as unavoidable.
However, as the NBA has cautioned, even the most well-intentioned economic reforms can lose legitimacy if the process of enactment is perceived as flawed.
Allegations That Go Beyond Taxation
The heart of the controversy lies not in whether Nigeria needs tax reform — a point on which there is broad consensus — but in how the laws were made. Allegations of inadequate consultation, rushed legislative procedures, and claims that the final versions of the Acts may differ from what the National Assembly approved have cast a long shadow over the reforms.
If proven, any post-passage alteration of legislative texts would amount to a grave constitutional breach. Nigeria’s Constitution vests lawmaking powers solely in the legislature, with the President’s role limited to assent or veto. Any deviation from this framework threatens the principle of separation of powers — the backbone of democratic governance.
This explains why the NBA’s call is not merely for clarification, but for a transparent investigation and a temporary suspension of implementation until public confidence is restored.
Economic Consequences of Legal Uncertainty
From an economic standpoint, the NBA’s warning deserves careful attention. Legal uncertainty is poison to investment and enterprise. Businesses plan on the basis of predictability; investors assess not only tax rates, but also the stability and credibility of the legal environment.
Nigeria already struggles with:
Declining foreign direct investment, which fell below $1.3 billion in recent years.
Inflation hovering above 30%.
A fragile exchange rate environment.
In such a context, doubts about the validity or durability of major tax laws can delay investments, encourage regulatory arbitrage, and increase litigation, thereby undermining the very revenue gains the reforms seek to achieve.
VAT, Federalism, and Regional Sensitivities
The controversy has also exposed deeper fault lines in Nigeria’s fiscal federalism. Proposed adjustments to VAT administration and revenue allocation have reignited long-standing regional debates about derivation, equity, and resource control.
While states that generate higher consumption welcome a more derivation-based approach, others fear widening fiscal disparities. This has transformed a technical tax issue into a politically charged national conversation, amplifying tensions and protests in some quarters.
A Question of Trust
At its core, this episode is about trust — trust in institutions, trust in process, and trust in leadership. Democracies thrive not only on outcomes, but on procedures that are seen to be fair, inclusive, and lawful. When citizens and stakeholders believe that laws emerge from opaque or questionable processes, compliance weakens and cynicism grows.
The NBA’s intervention reflects a broader public anxiety: that expediency may be trumping due process, and that economic urgency is being allowed to overshadow constitutional discipline.
The Way Forward
A transparent, independent review of the legislative process surrounding the Tax Reform Acts would not weaken the reforms; rather, it would strengthen them. Clarifying ambiguities, addressing legitimate concerns, and reaffirming procedural integrity would help rebuild confidence among businesses, investors, and citizens.
Nigeria’s economic challenges demand bold reforms, but its democratic health demands even bolder adherence to the rule of law. As the NBA rightly noted, laws with profound social and economic consequences must be “beyond reproach.”
In the final analysis, the Tax Reform Acts controversy is a defining moment. It will reveal whether Nigeria’s institutions can balance reform with constitutional fidelity — and whether the nation’s democracy is resilient enough to correct itself in the face of serious questions.
As the proverb warns, “When the foundation is shaken, what can the righteous do?” The answer, for Nigeria, lies in transparency, accountability, and unwavering respect for the rule of law.
