Obi: Nigeria’s current taxation policy will deepen hardship

Former Presidential candidate of Labour Party (LP) in the 2023 election, Peter Obi, has warned that Nigeria’s current taxation policy will deepen hardship and worsen the living conditions of citizens.

In a statement shared on his X handle on Friday, Obi said prosperity cannot be achieved by taxing poverty.

He stressed that for taxation to function as genuine social contract, it must be rooted in sincerity and concern for the welfare of the people.

“As I travel the world and meet leaders who have transformed their nations, one lesson is clear: lasting economic and social progress begins with national consensus,” he said.

According to him, leaders who succeed in uniting their people are guided by honesty and transparency.

“Transformative leaders—those who successfully unite their people around a shared vision—share a defining quality: honesty. Government must be transparent and truthful because citizens deserve nothing less from those who lead them.”

He said leadership should be about service, not exploitation or personal gains

“True leaders do not exploit their people to enrich themselves and a few cronies; they build trust, unity, and shared purpose, the foundation of sustainable progress,” he said.

Obi noted that Nigeria’s taxation policy must be judged by this standard of leadership, adding that to ensure effectiveness, taxation must be rooted in fairness, sincerity and concern for the welfare of the people.

“It is against this standard of honest leadership that Nigeria’s current approach to taxation must be measured. If taxation is to function as a genuine social contract, it must be rooted in sincerity, fairness, and concern for the welfare of the people.

“Every tax policy should be clearly explained, including its impact on incomes and its expected contribution to national development. Without this transparency, taxation becomes a tool of confusion and burden rather than a mechanism for growth and development.”

Obi, also a former governor of Anambra State, added that the country must rethink its taxation system in order to achieve economic growth and national unity.

“Nigeria must rethink taxation if it is serious about economic growth, national unity, and shared prosperity. The purpose of sound fiscal policy is not merely to raise revenue; it is to make the people wealthier so that the nation itself becomes stronger,” he stated.

He lamented that Nigerians were being asked to pay taxes without clarity or visible benefits, maintaining that the solution lies in empowering businesses and creating more jobs in the country.

“Yet today, Nigerians are asked to pay taxes without clarity, explanation, or visible benefit.

“The solution begins with empowering small and medium-sized enterprises in every community. When small businesses thrive, jobs are created, incomes rise, and the tax base expands naturally. You cannot tax your way out of poverty; you must produce your way out of it.”

He also raised concerns over what he described as a tax fraud saga, lamenting how, according to him, the country witnessed for the first time in history a period when laws were “forged”.

He noted, “This makes the ongoing tax fraud saga particularly alarming. For the first time in Nigeria’s history, a tax law has reportedly been forged. The National Assembly itself has admitted that the version gazetted is not what was passed into law. Yet citizens are being asked to pay higher taxes under this manipulated framework—without transparency, without explanation, and without corresponding benefits.”

Obi warned against celebrating revenue growth at the expense of citizens, arguing that taxing poverty does not create wealth but only deepens hardship.

“There is no virtue in celebrating increased government revenue while the people grow poorer. Taxing poverty does not create wealth; it deepens hardship. Any tax system that makes citizens poorer violates the fundamental principles of good governance and sound fiscal policy.”

He further stressed the need for what he described as lawful and people-centred tax system in order to boost production and restore trust between government and citizens.

“Nigeria needs a fair, lawful, and people-centred tax system—one that supports production, rewards enterprise, protects the vulnerable, and restores trust between government and citizens. Only then can taxation become a true tool for unity, growth, and shared prosperity.”

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