Nigeria’s 2027 presidential election will determine the next direction of the country’s tax system, with leading candidates offering contrasting prescriptions for how to raise revenue without stifling households and businesses.
The vote, scheduled for January 16, 2027, comes a year after Nigeria implemented four major tax laws that took effect on January 1, 2026.
The reforms introduced progressive personal income tax rates of up to 25 percent, exempted small businesses earning under N100 million from income and capital gains taxes, cut VAT to zero percent on essential goods and digitised administration under the Nigeria Revenue Service (NRS)
The framework pushed Nigeria’s tax-to-GDP ratio from about 10 to over 13.5 percent, with a long-term target of 18 percent.
Deepening reforms
Bola Tinubu, presidential candidate for APC plans to deepen the current reforms if re-elected. The administration has said the reforms are intended to broaden the tax base, improve compliance and make revenue collection more efficient.
Tinubu plans to target stronger revenue mobilisation, better tax administration, make the system more predictable for businesses and protect low-income earners and small businesses.
Atiku Abubakar¸ political candidate for ADC is pitching a business-friendly shift. He wants to reduce the cost of doing business through tax reliefs and incentives for businesses that create jobs and pay higher wages.
He made a comparison with how the Germany government reduced energy taxes on petrol and diesel temporarily, to cushion consumers and businesses against elevated fuel prices, and proposed targeted support for locally refined petrol rather than a blanket fuel subsidy.
Peter Obi, political candidate for NDC is planning to tax the wealthy more, and not the poor. Obi has criticised the government’s tax reforms, arguing that taxation should not place more pressure on citizens and businesses already struggling with high costs.
However, he has said he would support higher taxes on wealthy Nigerians to fund productive sectors and improve the welfare of poorer citizens. He also criticised excessive tax waivers, saying resources lost through such waivers could be redirected to agriculture and other job-creating sectors.
“I would do that. And I would explain it to them,” Obi said when asked if he would tax the rich to help the poor.
What experts are saying
Paul Orok, a finance and tax expert, commended the current tax administration in how it consolidates various tax demands into a single pool but also emphasised there are still loopholes that needs to be reviewed to ensure effectiveness of these reforms, and that’s the importance of knowing what the plans candidates have, going forward.
“Taxation is core to funding a nation’s life wire and in Nigeria, we are good at bringing out laws but what we need now from any candidate is effective implementation of the supposed laws and most importantly, transparency in how these taxes are channelled into improving the economy”, he said.
Faith Iyoha, senior economist at the Nigerian Economic Summit Group (NESG), said she believes all candidates will continue to play by the constituted tax Act but with slight difference in implication for households and businesses.
She emphasised what voters should look out for in candidate’s proposals that’s currently missing in the debate.
“The questions every voter should ask is, if a candidate is asking me to pay more or promising voters will pay less when elected, I would ask how exactly will his government finance the Nigeria he’s promising?” Iyoha asked.
“What is the tax-to-GDP target and who bears the burden? How will production be driven and jobs created? What measurable public services will taxpayers receive in return?” he further asked. “Until candidates answer these, we are debating tax rhetoric rather than tax policy,” she added.
Current tax picture
“Nigeria has seen some improvement in tax revenue since the tax Act 2025 became effective, however it remains a relatively low-tax economy compared with similar countries and the burden it puts on businesses is still high” said Iyoha.
According to data from Nigeria Revenue Service (NRS), annual VAT collections rose to N8.61 trillion in 2025. The first half of 2026, VAT reached N4.31 trillion, representing a 12.26 percent growth compared to the same period in 2025
Corporate income tax collections, however, stood at N1.37 trillion in the first quarter of 2026, compared with N1.49 trillion in the fourth quarter of 2025. The decline came amid changes introduced by the new tax framework, including a 25 percent corporate tax rate for large companies and tax reliefs for qualifying small businesses, as well as broader macroeconomic pressures.
The figures highlight the challenge awaiting whoever wins in 2027: raising more revenue to fund the government while ensuring that taxation does not further increase pressure on households and businesses.
Iyoha proposed that the current tax framework should be judged on 5 dimensions which include user-centric architecture, revenue generated, distribution of tax burden, tax yield and fiscal exchange.
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