TINUBU’S TAX REFORM IS AN AGENDA TO INCREASE REVENUE FOR LOOTING AND SERVICING THE OPULENT LIFESTYLE OF RECKLESS POLITICAL CLASS
Taxing workers and the poor under current economic realities and gross irresponsibility of government is unjustifiable and will deepen mass poverty, inequality, and hardship!
The Socialist Party of Nigeria (SPN) rejects the Tinubu-led government’s justifications for the controversial tax reform laws, we learnt has taken effect from January 1, 2026. We also reject the claim that the laws are intended to boost revenue for improved investment in education, healthcare, infrastructure, or to end poverty and inequality. Similar arguments were used to justify the removal of fuel subsidy, a policy which has instead left millions of Nigerian working people poorer as a result of soaring inflation and increased cost of living with no meaningful improvement in public services or living standards.
A recent World Bank–linked assessment indicates that over 60 percent of Nigerians now live in poverty, amounting to well over 130 million people and a sharp rise compared to pre-2023 figures. Multidimensional poverty indicators further reveal widespread deprivation in access to healthcare, education, decent housing, clean water, and electricity, particularly in rural areas where poverty levels often exceed 70 percent. These realities despite the official report of modest GDP growth of around 3 percent in the recent years expose the hollowness of government’s claims that new tax measures will alleviate poverty or reduce inequality by the time it improves country revenue base.
Given these unfortunate realities, we strongly hold that the moral and political legitimacy of imposing tax burdens on workers and the poor is highly questionable. It is double jeopardy especially in Nigeria, where basic amenities that would justify taxation in any functional society – such as stable and affordable electricity, potable water, motorable roads, affordable healthcare, quality public education, and security – are either grossly inadequate or completely absent. In reality, working people are compelled to privately provide electricity through generators, water through boreholes, security through vigilante arrangements, and even roads and schools through community self-help. Subjecting the same people to more taxes under this circumstance amounts to multiple taxation and an outright punishment for government failure.
The government has attempted to present the new tax regime as progressive by putting the annual tax-exempt income threshold at N800,000. This is grossly inadequate. Given the present reality of economic hardship, especially as a result of Tinubu’s neo-liberal policies of fuel subsidy removal and the naira devaluation, we of the SPN believe that anybody who earns less than N200,000 per month (N2.4m annually) should be exempt from income tax. This is because of the excruciatingly high cost of living and government’s abandonment or poor funding of social program, such that at present ordinary people have to pay high prices for food, education and healthcare, produce their own electricity or pay high tariff, provide their own water and security among other basic needs.
In other words, contrary to the claim of the government, under the new tax reform many ordinary workers who are already struggling with food insecurity, high transport costs, rent, and education and healthcare expenses, remain liable to taxation. This shows that the claim by government officials and mouthpieces that up to 97 or 98 percent of workers are exempt from income tax rely on technical assumptions that fail to reflect the lived reality of workers whose earnings are eroded daily by inflation and hidden deductions. The reality is that most low-income workers struggle to do additional jobs or economic activities just to earn additional paltry incomes will pay more tax.
Again, the claim that the tax reforms are designed to target big businesses and high-income earners also fails in the face of critical analysis. Nigeria’s economy remains fundamentally capitalist in nature, and under such a system, additional costs imposed on corporations are rarely absorbed by capitalists. Instead, these costs are transferred to consumers through higher prices of goods and services, wage suppression, job losses, or casualisation of labour. As a result, the working class and the poor ultimately bear the burden of policies that are presented as purportedly targeting the wealthy.
This is why in addition to our support for heavy tax for the rich and big businesses we argue for price control and call on trade unions to consistently fight against anti-labour practices such as casualization and poor wage. Ultimately, we argue for the nationalization and democratic management of the commanding heights of the economy so that the collective wealth of the society presently at the disposal of the few will be recovered and used to develop the economy and society for the benefit of the vast majority
Even though, the government insists that essential goods such as food and healthcare remain exempt from value-added tax and that VAT has not been increased beyond 7.5 percent, this offers little real relief to working people. Inflation, particularly food inflation, remains extremely high, driven by fuel price hikes, currency depreciation, transport costs, and market speculation. Even goods that are officially exempted from VAT become more expensive due to increased production and distribution costs, meaning that workers pay indirectly for policies that are claimed to protect them.
In certain areas of the tax laws, the government does not hide its class bias against ordinary people. For instance, according to Section 187 (j) of the Nigeria Tax Act big businesses in the power/electricity industry are exempted from VAT while electricity consumers will continue to pay VAT on electricity bills. Also, Tenth Schedule (Section 166 – 202) of the Nigeria Tax Act exempts many big companies/businesses from paying tax between 12 and 20 years depending on the sector while most poor and ordinary persons will pay tax.
It is also important to reiterate that the promise that increased tax revenue will translate into improved public services will definitely be undermined by the government’s fiscal priorities in addition to characteristic corrupt practices and looting of public resources by the top government functionaries. Despite rising revenue projections, Nigeria continues to spend a significant portion of its income on debt servicing, while allocations to education, healthcare, and social welfare remain grossly inadequate. Public hospitals are understaffed and under-equipped, public schools are deteriorating, and insecurity continues to threaten lives and livelihoods across the country. These conditions demonstrate that the problem is not simply revenue generation, but the class orientation and priorities of the Nigerian ruling elite.
Going by this background, it is obvious that the tax reform is not a neutral technical adjustment but a political instrument designed to shift the burden of economic crisis onto workers, youth, retirees, and the poor with an agenda to adequately protect the opulent lifestyle of the political class and economic interests of their acolytes who masquerade as business persons. This is why we reject the idea that mere public hearings, as proposed by the Nigeria Labour Congress (NLC) leaders, are sufficient. Without a clear rejection of the tax and a serious mass-based discussion of its implications, such hearings risk becoming a procedural cover for policies that are fundamentally anti-people.
We therefore call on the NLC, the Trade Union Congress (TUC), and allied civil society organisations under a broad Labour and Civil Society Coalition (LASCO) to organize a series of mass actions to reject the tax, demand the tax-exempt income threshold at N2.4 million, not N800,000 and fight for the reversal of all anti-poor policies of the Tinubu government. Beyond opposing the new tax reform and resisting anti-poor policies in general, we call for building of a genuine mass working people’s political alternative on a socialist program for a political representation for the working people in the 2027 elections and beyond. Such a party must build a mass movement to consistently fight against anti-people policies and wrest political power to enthrone a system that prioritises human needs over profit of a few and elite privilege.
Abiodun Bamigboye
Acting National Chairperson
Chinedu Bosah
National Secretary
Email: [email protected]