Tax Policy & National Development
By Grace Alegba
Lagos, Jan. 1, 2026 – In a pivotal statement coinciding with the implementation of Nigeria’s new fiscal framework, the Association of Enterprise Risk Management Professionals (AERMP) has issued a clarion call for collective national effort. The association urges all citizens and institutions to actively support the newly enacted tax laws, framing compliance not merely as a legal obligation but as a fundamental pillar of sustainable national development and risk mitigation.
Dr. Olayinka Odutola, the Director-General of AERMP, emphasized in an interview with the News Agency of Nigeria (NAN) that the laws represent a strategic shift designed for long-term public benefit. “The law is for the benefit of everybody. All hands must be on deck to make it work,” Odutola stated, positioning tax compliance as a shared civic responsibility rather than a punitive measure.
The Global Context: Why Tax Compliance is a Non-Negotiable for Development
Odutola anchored his argument in global economic principles. “Developed economies thrive largely on citizens’ compliance with tax laws,” he explained. This isn’t just about revenue collection; it’s about building a social contract. Consistent tax revenue allows governments to reliably invest in critical infrastructure, healthcare, education, and security—services that directly improve the business environment and quality of life. Nigeria’s aspiration for sustainable growth, he stressed, is inextricably linked to cultivating a similar culture of voluntary compliance.
Addressing the Core Resistance: The Elite and the Tax Net
The AERMP DG identified the heart of the opposition. “Opposition to the new tax laws was being driven mainly by members of the elite and political class who fear being captured under an expanded tax net.” This highlights a critical challenge in many developing economies: a narrow tax base. Odutola provided a staggering statistic to illustrate the scale of the issue: “Only about 10 million Nigerians currently pay taxes out of an estimated population of 200 million.”
This 5% effective taxpayer rate places an unsustainable burden on a tiny segment of the population and formal sector while leaving vast economic activity untaxed. “We cannot continue like this. Everybody should embrace the tax laws, and compliance is important,” he asserted.
A Pragmatic Approach: Progress Over Perfection
Recognizing the complexity of overhauling a national tax system, Odutola advocated for a pragmatic and supportive public stance. “We should not be looking at perfection at the early stage of implementation,” he advised, urging Nigerians to view the policy as an evolving framework. “This tax policy is something we should encourage. Everybody has a role to play one way or the other in its implementation.” This perspective encourages constructive feedback and iterative improvement rather than outright rejection due to initial hiccups.
As a chartered risk expert, Odutola pointed out a significant systemic risk: “Some regions had grown accustomed to not paying taxes, a practice he described as unhealthy for balanced national development.” This uneven compliance creates disparities in development funding and can fuel regional grievances.
Beyond Revenue: The Ripple Effects of a Functional Tax System
Odutola outlined benefits that extend far beyond government coffers. He clarified that the reforms are designed to be progressive, having “removed the tax burden from the poor.” A fair and efficient tax system can:
- Promote Economic Prosperity: By funding stable infrastructure and public services, it creates a predictable environment for business investment.
- Reduce Inequality: Progressive taxation and targeted social spending can help bridge wealth gaps.
- Enhance Security: “Helping to reduce insecurity, crime and criminality,” as improved economic opportunities and state legitimacy diminish the drivers of instability.
Navigating Controversy and the Path Forward
Addressing technical controversies, such as alleged discrepancies in the law’s versions, Odutola cautioned against politicization. He proposed a solutions-oriented approach: “Stakeholders can address grey areas after implementation rather than attempt to halt the law.” This emphasizes the importance of moving forward with the core intent while using established legislative and judicial processes to refine details.
The AERMP committed to intensifying advocacy to educate Nigerians on the tangible link between taxes and services—a key driver of voluntary compliance. Finally, Odutola appealed to the media as essential partners. “They had a responsibility to promote understanding of the tax policy in the interest of national development,” he said, underscoring the need for accurate, non-sensational public awareness.
His concluding remark served as a rallying cry: “We need to move Nigeria forward aggressively.” The success of the tax reforms, as framed by the risk management association, is a foundational step in mitigating the country’s systemic economic and social risks and building a more resilient future.
(Source: NAN)
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Edited by Olawunmi Ashafa
