The Centre for Promotion of Private Enterprises (CPPE) has urged the federal government to adopt a phased, pragmatic, and socially sensitive approach in the implementation of new tax laws, stating that though the tax reform is critical for Nigeria’s fiscal sustainability, implementation strategy will ultimately determine the success or failure.
Muda Yusuf, chief executive officer, CPPE stated this in a policy brief issued to journalists on Sunday. He stressed that rhe reform must be anchored on trust, economic realities, and political timing, which for him, offers the most credible pathway to sustainable revenue growth, expanded compliance, and long-term legitimacy.
He noted that Nigeria’s ongoing tax reform ranks among the most ambitious fiscal restructuring efforts in recent decades. “Conceptually, it is a sound and progressive framework—aimed at strengthening revenue mobilisation, improving equity, simplifying the tax system, and aligning fiscal policy with economic diversification and growth objectives.
Read also: Macroeconomic stability achieved, structural risks persist into 2026 – CPPE
“However, history offers a sobering lesson: good policy design does not guarantee good outcomes. The ultimate success or failure of Nigeria’s tax reform will depend far less on its legislative provisions and far more on how it is implemented. Without careful sequencing, political sensitivity, and economic realism, even well-intentioned reforms can trigger resistance, disrupt livelihoods, and further erode public trust.
“This is the central concem of the Centre for the Promotion of Private Enterprise (CPPE),” he added.
Yusuf explained that tax reform is not a one-off exercise but a dynamic process that must evolve with implementation feedback, economic conditions, and social realities. Nigeria’s current reform is unfolding under unusually delicate circumstances.
He noted that the Nigerian economy is still absorbing the aftershocks of elevated inflation, weakened purchasing power, and the adjustment costs of fuel subsidy removal and foreign exchange reforms.
Yusuf explained that many households and businesses are experiencing reform fatigue, adding that expecting full and simultaneous compliance across all sectors of the economy is unrealistic.
“A rigid, enforcement heavy approach risks undermining reform credibility before its benefits have time to materialise,” he said.
He noted that public resistance to the reform is not merely a communication failure but resistance rooted in lived experience, as past reforms have translated into higher living costs and declining welfare for many Nigerians.
Yusuf further emphasised that in the short to medium term, tax authorities should prioritise the formal sector, where compliance capacity already exists. He added that the informal sector should be integrated gradually through incentives, sustained tax education, simplified compliance tools, and digital onboarding support.
“Any serious discussion of tax reform in Nigeria must confront the scale of the informal economy. With an estimated 40 million micro, small, and nano enterprises—over 80 percent operating informally—the informal sector is not peripheral; it is central to employment, income generation, and economic resilience.
“Most informal operators lack structured record-keeping systems and have limited understanding of tax concepts such as Tax Filing obligations, Company Income Tax [CIT], Value Added Tax [VAT], Personal Income Tax [PIT], Withholding Tax etc.. Businesses are largely cash-based, operate on thin margins, and often lack the literacy and digital capacity required for compliance. They also lack the capacity to digest the technical and somewhat complex issues around taxation.
“Yet the new tax framework introduces mandatory filing requirements, defined record-keeping standards, penalties for non-compliance, and presumptive taxation where records are inadequate. Without careful sequencing, these provisions risk criminalising informality rather than encouraging gradual and voluntary formalisation,” he said.
He also noted that with 2026 shaping up as a pre-election year, political and social caution is imperative, addig that aggressive, broad based enforcement risks social discontent, political backlash, and potential reform reversal.
