Re-imagining the Future of Nigeria's Economic Development in the New Taxation Era

Abstract

Nigeria’s perennial quest for sustainable economic development is fundamentally constrained by its excessive reliance on volatile oil revenues and a historically weak non-oil tax base. This article analyzes the evolution of Nigeria's taxation policies, tracing their colonial origins, the post-independence shift to oil dependence, and the recent transformative tax reform agenda (Nigeria Tax Act 2025). It argues that the 'New Taxation Era' characterized by digitalization, enhanced compliance mechanisms, and base broadening offers a critical juncture to re-imagine economic development. The study utilizes a policy-oriented research design evaluating the historical evolution and real-world impact of Nigerian taxation policies from 1970 to the present, focusing entirely on textual evidence and contextual understanding. It was proposed that to sustain tax justice and a workable fiscal social contract, the government must institutionalize a clear, verifiable link between tax revenue and public services, conduct sector-specific digital literacy training, delivered in local languages, to bridge the digital divide in the informal sector, eliminate all instances of multiple taxation, and continuously review the VAT exemption list to ensure that all essential goods and services consumed disproportionately by low-income households (e.g., specific food items, basic public transport) remain zero-rated or exempt. This helps neutralize the regressive impact of consumption taxes, thereby ensuring the tax system promotes tax justice. The paper concludes by suggesting a three-pillar framework: Progressive Tax Justice, sectoral tax incentivization, and technology-driven accountability, as the pathway to a resilient, diversified, and equitable Nigerian economy.