Taxing Poverty: When Policy Becomes Punishment

Femi Akintunde-Johnson

There is a Nigerian proverb that says when the soup is tasteless, the salt should not be blamed alone. Today’s economic soup is not just tasteless; it is thin, bitter, and served in broken bowls. Yet, at this exact moment, the President Bola Ahmed Tinubu administration has chosen to add a new ingredient: a hydra-headed tax regime whose stated intention is fiscal responsibility, but whose practical effect is to chase the poor into a shrinking corner.

Let us begin from ground level, not from air-conditioned conference rooms in Abuja.

Joe is not an abstraction. He is real – and his story, originally shared by policy analyst Emmanuel Orjih, is painfully familiar across Nigeria. The young man earns ₦75,000 a month, lives modestly, feeds sparingly, and dreams cautiously. He is the gateman who is also a gardener. The shop assistant who is also a student. The village nephew who keeps a house from collapsing into weeds. He is unmarried, lives rent-free in a village house, tends a garden, and keeps a human presence where abandonment would otherwise reign. Policy rarely sees Joe, but Joe will feel policy – first, hardest, and longest.

The official assurance is that the poor are protected. Arithmetic, however, has no respect for press statements. At a recent tax explainer session with senior officials of the Federal Inland Revenue Service, Orjih posed a simple question: would Joe pay tax under the new regime? The initial answer was no. But when the officials were invited to walk through their own framework – line by line, deduction by deduction – the mathematics betrayed the reassurance.

Once the imaginary reliefs were stripped away and only what Joe actually qualifies for was retained, the picture changed. Pension contributions shaved off a modest amount, leaving him with a taxable income of about ₦69,000 a month. That figure places him squarely within the new tax bracket. The officials reportedly reversed themselves. Quietly. Reluctantly. Joe, they conceded, would pay tax.

That moment matters. Because when Joe becomes taxable, a line is crossed. Nigeria’s poor enter the tax net.

Let us clear the fog. Poverty is not a sentiment; it is a metric. By the World Bank’s poverty threshold for lower-middle-income countries, anyone earning below roughly ₦190,000 a month in Nigeria is classified as poor. By that yardstick, Joe is not “almost poor” or “temporarily strained”. He is poor – unmistakably so. If the state taxes him, then the state is taxing poverty. No press release can negotiate with arithmetic. No rhetorical gymnastics can reverse that conclusion.

We are told this is about “widening the tax base”. Fine words. Neutral words. Technocratic words. But words, like fishing nets, must land somewhere. Nigeria’s wealthy are already inside the tax net – at least on paper. If the net is widening, it can only stretch downward. It will not catch goats already in the pen. It will catch the barefoot child running past.

And so Nigerians are entitled to ask an uncomfortable question: to what end?

We have seen money before. Plenty of it. Budgets passed with ceremony. Loans collected with speed. Fuel subsidy “savings” announced with drumrolls. Oil revenues sold forward. VAT raised, widened, normalised. Loot recovered and displayed. Internally generated revenue flowing daily like a stubborn tap. Development funds received with smiles and communiqués.

Yet, here we are. Electricity largely remains a private arrangement between citizens and generators. Water is a personal project. Security is outsourced to prayer warriors, vigilantes, and luck. Healthcare is a gamble; education is a luxury. Roads are commissioned more often than they are completed. Poverty is not retreating; it is advancing.

Wisdom, not cynicism, demands that governments be judged by patterns, not promises. If previous pools of public money did not translate into public relief, why should money squeezed from Joe’s already thin wallet perform a miracle?

Economics, too, has its own stubborn truths. Raising taxes is not sinful. Timing, however, can turn policy into punishment. When inflation is high, taxes eat purchasing power. When real wages are falling, taxes deepen desperation. When unemployment is rising and informality dominates, taxation pushes survival further underground. When safety nets are weak, taxation becomes naked extraction.

Nigeria today is not suffering one of these conditions. It is suffering ALL of them at once. To ignore this is not reform; it is recklessness.

In such circumstances, orthodox economics – not ideology – advises restraint. Stabilise prices first. Support incomes. Grow the economy. Protect the vulnerable. Build administrative capacity. Then, and only then, broaden taxation fairly. Reverse the sequence, and you do not raise sustainable revenue; you shrink trust, encourage evasion, and harden poverty.

The cruel irony is that the same poor being asked to “contribute” already self-provide what taxes should ordinarily supply. They pay for power in diesel. For water in sachets. For security in contributions. For education in school fees. For healthcare in cash and hope. Now they are asked to pay again, this time directly to a state whose presence they mostly encounter through demand notices.

Naturally, suspicion follows. Is this rush to tax about efficiency, or about sustaining an expensive political culture?. When convoys grow longer while stomachs grow emptier, when allowances expand while classrooms collapse, when public-funded medical tourism thrives while local hospitals decay, when palliatives travel faster into warehouses than into kitchens, trust evaporates.

This is why the growing resistance to the new tax regime is not rebellion; it is self-preservation. It is not anti-government; it is pro-survival. The poor are not rejecting responsibility; they are demanding fairness, sequencing, and evidence that sacrifice travels upward as well as downward.

Nigeria stands at a crossroads. One road insists that the poor must keep tightening belts that have no more holes. Hunger deepens. Resilience frays. The nation weakens quietly. The other road pauses, reassesses, and fixes leakage before squeezing throats. Families breathe. Survival stabilises. The country regains a fighting chance.

This is not a call to disorder. It is a plea for sense. Citizens can remain within the law by understanding their rights, demanding clarity, and insisting on transparency. Knowledge, not protest, is the first remedy – it’s lawful.  Questions are legal. Scrutiny is patriotic.

And the simplest question remains the most devastating: if government has been collecting money all this while and your life did not improve, why should this one be different?

In economics, as in life, hope without evidence is not optimism. It is gambling – and it is always the poor who are asked to stake what little they have left.