New Tax Acts about building trust, not just raising revenue — Oyedele

Nigeria's Minister of Finance Taiwo Oyedele has repositioned the government's landmark tax reform agenda, signalling a strategic pivot from pure revenue extraction toward institutional credibility—a shift with profound implications for foreign investment and domestic business confidence.

Speaking virtually at the 2026 Annual Conference of tax professionals, Oyedele emphasised that the suite of new tax acts being implemented are fundamentally about restoring public trust in Nigeria's fiscal system, not simply maximising government collection. This reframing is significant: it suggests the administration recognises that sustainable tax compliance depends less on enforcement and more on transparency and perceived fairness.

**Why Is Trust More Important Than Revenue Right Now?**

Nigeria's tax-to-GDP ratio sits at approximately 10–11%, among the lowest globally and far below the 15% benchmark for African peers. Historically, this gap has been attributed to two factors: widespread informality and deep-rooted mistrust of government revenue use. However, Oyedele's statement indicates the administration is targeting the second lever—citizen and business confidence—as the faster path to compliance expansion.

When taxpayers believe their money funds essential services and isn't diverted, voluntary compliance rises. Conversely, perception of corruption or misuse breeds evasion. By emphasising trust-building, Oyedele is acknowledging that the 2023–2025 tax reforms (including the VAT increase, excise duty restructuring, and corporate income tax modernisation) will only succeed if Nigerians see tangible returns: functioning infrastructure, schools, hospitals, and transparent budget execution.

**How Does This Change Investor Calculations?**

For foreign and diaspora investors, this messaging is a green light on regulatory stability. A government explicitly positioning itself around institutional integrity—rather than aggressive revenue-chasing—suggests lower risk of sudden tax policy reversals or arbitrary enforcement. It also signals commitment to digital tax administration (FIRS modernisation), which reduces compliance friction and corruption opportunity.

The reformed tax acts (including updates to Income Tax Management Act, VAT Act, and customs procedures) are already live. Oyedele's framing reinforces that these aren't punitive but foundational—designed to level the playing field between compliant and non-compliant operators, and to align Nigeria with global standards that multinational investors expect.

**What Are the Practical Implications?**

Three takeaways for stakeholders: (1) Tax amnesty programmes and voluntary disclosure windows will likely continue, reflecting the trust-building narrative over heavy-handed enforcement; (2) Transparency initiatives—public spending dashboards, budget tracking—should accelerate, as proof of trust-worthiness; (3) Simplified compliance for small and medium enterprises (SMEs) is likely to remain policy priority, since trust-building depends on broadening the taxpayer base inclusively, not squeezing existing payers.

The minister's statement also indicates the administration is aware of fatigue: Nigerians have absorbed VAT hikes, fuel subsidy removal, and new tariffs. Further aggressive revenue measures without demonstrable fiscal discipline would trigger backlash. By reframing the agenda as trust-centred, Oyedele is buying political and social space for the reforms to mature.

The financial markets have already priced in some of this logic—the naira has stabilised and FPI inflows have resumed since tax modernisation began. However, sustained investor confidence depends on execution: whether the trust narrative is backed by verifiable improvements in budget transparency, infrastructure delivery, and anti-corruption enforcement.

---