Tax Reform: Between Intent and Perception

What should have passed as a routine adjustment in Nigeria’s tax code has instead unfolded as a daily drama of debit alerts and doubt, turning a fifty-naira stamp duty into a mirror reflecting the country’s deep unease with how the state reaches into the pockets of its citizens, writes Festus Akanbi

The harmattan haze that settles over Lagos at dawn is no longer the only thing Nigerians wake up to, as their phones buzz with debit alerts that feel like a pickpocket’s hand in their pockets.

Painful Bank Debit Alerts

Since January 1, every transfer above N10,000 carries a fixed N50 stamp duty, and the country has been dragged, sometimes unwillingly, into a national conversation about tax. It is happening everywhere: in beer parlours, in church WhatsApp groups, and in ride-hailing waiting lots where drivers compare deductions like battle scars.

The fear, it must be said, is not the N50 itself. It is the uncertainty of the hand that takes it. When a civil servant wakes at 2 a.m. to an unfamiliar debit, or a yam seller is told she cannot open a second account without a Tax Identification Number, the instinct is not to consult the Finance Act. It is to move money out of the system entirely, into cash or the mattress, where no algorithm can sniff it. That instinctive retreat is costly. It shrinks banks’ deposit bases, pushes credit back into the informal shadow economy, and fuels a cottage industry of “tax clearance” touts who sell immunity that does not exist.

Between Policy Intent and Public Perception

The irony is sharp. The 2026 fiscal reforms were designed to achieve the opposite: to widen the tax net without widening the pain, to make taxation more predictable, and to reduce leakages rather than multiply them. Yet policy intent and public perception are moving in opposite directions. The gap between them is already costing the economy more, in lost trust and financial disintermediation, than the revenue the new law hopes to harvest.

To understand the panic, the signal must be separated from the noise, said a former director with the defunct Federal Inland Revenue Service, who pleaded not to be quoted. Speaking with THISDAY during the week, he said, “The stamp duty itself is not new. In its earlier form as the Electronic Money Transfer Levy, it was often applied unlawfully, sometimes debited from both sender and recipient, and at rates that varied by bank. The new law does something simpler than the rumours suggest: it consolidates the charge at the sender’s end and fixes it at a flat rate of N50. In aggregate terms, the burden on the system has fallen, not risen.”

According to him, the same applies to bank reporting requirements. Accounts with monthly turnover above N5 million are flagged, not for automatic confiscation, but to improve compliance mapping. There is no provision for arbitrary debits. But these clarifications are buried in a 276-page statute that no trader in Alaba or driver stuck on the Third Mainland Bridge has time to read.

Fiscal Ambushes and Opaque Deductions

Into that vacuum, rumours rush. Every account will be taxed automatically. Transfer narrations will be monitored. The government is coming for the widow’s mite. Anxiety is amplified by the familiar layering of charges Nigerians already endure: VAT on transfer fees, card maintenance fees, SMS alerts. Each is lawful in isolation; together, they feel like death by a thousand cuts. A driver who earns N15,000 from a ride sees the platform deduct commission, the bank deducts stamp duty and VAT, and the local council still charges a daily parking fee. This is not paranoia; it is lived multiplicity.

Policy does not land in a vacuum. It meets a society with a long memory of fiscal ambushes and opaque deductions. That history explains why Nigerians fear taxes less than surprises. The challenge, therefore, is not merely legal. It is communicative.

Calming the Nervous Public

Financial analysts, in their commentaries on various television programmes monitored in Lagos last week, agreed that the government must first learn to communicate with the public. Dense circulars may satisfy internal compliance requirements, but they do little to reassure a nervous public. The Revenue Service needs to step beyond PDF uploads into the spaces Nigerians already inhabit: short videos, radio explainers, vernacular messaging. A 30-second clip showing a woman warned of a N50 duty before sending money to her mother would do more than a dozen press releases. Predictability, more than generosity, restores trust.

Banks must also simplify the story. January statements should not read like forensic puzzles. A one-page breakdown showing what was deducted, why, and how it compares with the previous year would change the tone. When people can see that total charges are not spiralling, pain becomes data, not drama.

Confidence also depends on the ability to complain without exhaustion. The Central Bank’s Consumer Protection Department received thousands of petitions last December, yet few escalated beyond the initial stage because the process felt burdensome. Complaints require emails, forms, and patience that many Nigerians cannot spare.

Dispute Resolution

Technology offers a fix. Every banking app should have a visible “dispute” button. One click should freeze the debit, route the ticket to the bank’s ombudsperson, and copy the regulator. If the issue is not resolved within a defined window, the amount should be provisionally re-credited. Nothing restores confidence faster than a system that can correct itself quickly.

Beyond apps, the conversation must move to the street. Nigeria’s most influential forums are not press briefings but Community Development Association WhatsApp groups, where everyday issues are debated. That is where stamp-duty myths mutate. A modest programme of community “Tax Champions”, teachers, union leaders, market women, could change the texture of this debate. Equipped with simple explainers in major languages, their role would be to translate, not defend, policy. Reassurance from a familiar face often travels faster than official pronouncements.

Fairness must also be visible. The requirement that all account holders obtain a Tax Identification Number is sensible, but it becomes punitive when citizens confront clunky portals and touts. Integration is the solution. Banks already perform biometric onboarding; TIN enrolment should be embedded seamlessly into that process. Open an account today, and receive your TIN by text before midnight.

Analysts believed transparency should follow. According to a top banker, Mr. Stephen Ogunsola, “A public dashboard showing how many new taxpayers have been added, what they paid, and what specific clinics, classrooms, or roads those funds financed would help rebuild the psychological contract. The moment citizens see a link between deductions and services, taxation no longer feels abstract.”

Ogunsola agreed that structural reassurance is equally essential, explaining that bank charges feel frightening because they seem limitless. “A legislated cap on cumulative charges over a year would place a ceiling on anxiety. Additionally, a no-frills, zero-maintenance account that is insulated from card and SMS fees could protect low-income users. Any revenue forgone would be minimal compared with the goodwill gained,” he said.

Finally, analysts argued that credibility must start at the top. They pointed out that the political class should publish its own tax returns. Seeing ministers, governors, and legislators subject themselves to the same rules would speak louder than any slogan. Reciprocity is the fastest cure for cynicism.

If these steps are taken, hysteria can give way to vigilance. Nigerians will still scrutinise every debit alert, but within a framework where errors can be corrected and abuse punished. Over time, the culture can shift from avoidance to engagement. The tax base will broaden not because the state grew sharper teeth, but because citizens gained clearer eyes.

New Narratives

Fiscal reform is not merely a spreadsheet exercise; it is a storytelling project. Today, the dominant story is that the new tax law is a pickpocket. The evidence suggests otherwise, but it does not speak for itself. The consensus among industry analysts is that until the government becomes the narrator-in-chief, speaking plainly, admitting missteps, and showing how every naira returns as roads, vaccines, or broadband, the fear will persist.

Yet the opportunity remains. Replace rumour with receipts, opacity with clarity, and surprise with schedules, and citizens now rushing to close accounts may one day defend the very system they once feared. That is when reform moves from statute to shared belief, and when the economy can finally breathe again.