By Yunus Yusuf
Lagos, Jan. 7, 2026
The Coalition for Affordable and Regular Electricity (CARE) has issued a powerful call for a fundamental restructuring of Nigeria’s tax system, urging the Federal Government to implement a truly progressive framework that places the heaviest burden on the wealthiest citizens while providing robust protections for low-income earners and workers.
In an exclusive interview with the News Agency of Nigeria (NAN), CARE’s National Coordinator, Mr. Chinedu Bosah, argued that the proposed tax reforms present a critical juncture for economic justice.
The Core Principle: Equity and Transparency
Bosah emphasized that any new tax regime must be built on three pillars: equity, transparency, and democratic management. “Taxation is not merely a revenue tool; it is a powerful instrument of social policy,” he stated. “A progressive system, where tax rates increase with income, is essential to reduce the staggering inequality that plagues our nation.”
He welcomed the proposal to exempt individuals earning below ₦250,000 monthly as “a necessary first step.” However, Bosah stressed that exemptions alone are insufficient. “The true test is in the application of the revenue. Will it be transparently deployed to improve living conditions—to fund public healthcare, education, and infrastructure—or will it vanish into the opaque system that sustains the ruling elite?”
The Current System’s Flaws: A Double Burden on the Poor
Bosah delivered a sharp critique of the existing tax approach, warning it risks deepening the economic crisis for ordinary households. “The proposed laws, as they stand, will further undermine purchasing power,” he explained. “When you tax the consumption of a low-income worker, you are directly reducing their ability to afford food, transport, and, crucially, electricity.”
He connected taxation directly to CARE’s core mission: energy access and affordability. “While tax policies don’t directly affect the grid, they have a severe indirect impact. As disposable income shrinks, electricity consumption falls because people simply cannot pay their bills. This creates a vicious cycle of energy poverty that stifles productivity and well-being.”
The Power Sector’s Unjust Tax Privileges
Bosah highlighted a glaring contradiction at the heart of the system. He pointed to Section 187(j) of the Nigeria Tax Act, which grants Value Added Tax (VAT) exemptions to major electricity generation and distribution companies.
“This is the height of inequity,” he argued. “Large power corporations enjoy VAT-free operations and benefit from extensive tax holidays—sometimes for up to 20 years—while the end-user, the struggling consumer, pays VAT on every unit of electricity consumed. There is no economic or moral justification for exempting these profitable entities while relentlessly taxing the poor.”
He noted that the current reforms do not increase operational costs or spur new investment in the failing power sector. “The companies are already enjoying massive incentives with little to show for it in terms of stable, affordable supply. The tax burden is misplaced.”
A Call for Holistic Reform
For CARE, the solution extends beyond mere rate adjustments. Bosah called for a democratically managed tax fund, where communities have a say in how revenues are allocated to local projects like transformer installations, grid upgrades, and public lighting.
“Properly managed, progressive tax revenue can be the engine for mass job creation, industrial development, and the delivery of basic amenities,” Bosah concluded. “But this requires a complete break from a system that subsidizes the powerful and corporations at the expense of the working class and the poor. We must tax wealth, not poverty.”
The coalition’s stance positions tax justice as inseparable from the fight for affordable public services, framing equitable taxation as the foundation for a more just and functional society. (NAN)
Edited by Kamal Tayo Oropo
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