NESG survey: 74.4 per cent of households accept government's right to tax, but trust in tax authorities remains low

Nigerians accept, in principle, that their government has the right to collect taxes. What they do not accept, in practice, is that their money buys fair treatment. Those, in summary, are the central findings of a survey of 18,000 households and 9,097 businesses conducted for the Nigerian Economic Summit Group, whose release at the summit in Abuja provided the most granular reading yet of the fiscal social contract between taxpayers and the state.

Legitimacy is high, trust is the deficit

Seventy-four point four per cent of households surveyed affirmed that the government has the right to collect taxes, a foundation of consent that fiscal authorities can treat as an asset. The same survey, however, found that trust in tax authorities remains low, and that the gap between accepting taxation and supporting its administration is where the system's problems live. When only a supermajority backs the principle but trust erodes in implementation, compliance becomes transactional: taxpayers pay the minimum that is enforced, resist the rest, and view the tax man as a negotiator rather than a service provider.

The evidence that implementation is the problem is strongest in the informal-levy finding. Two-thirds of respondents, 67.2 per cent, reported that they pay levies beyond the formal tax system, collected by agents of state and local authorities whose legal basis is often contested. These charges, from market dues to roadside tolls and community levies, are precisely the form of taxation that breeds distrust, because they are set arbitrarily, collected without receipts and provided no services in return. They represent, in effect, a second, ungoverned tax system running parallel to the official one, and the survey's findings suggest it touches more lives than officials would like to admit.

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What businesses say

The survey's business responses reinforced the household picture. Companies across sectors identified multiple taxation as a central constraint on their operations, echoing the monthly Business Expectations Survey published by the Central Bank of Nigeria, in which firms have ranked multiple and high taxation first among their operating complaints for consecutive months, with a constraint score of 67.1 points in the September reading. The convergence of an independent survey of thousands of firms with the central bank's rolling poll is itself a finding: whatever else Nigerian businesses disagree on, the tax system's multiplicity and its arbitrariness are not in dispute.

The fiscal consequences run in both directions. A system perceived as unfair collects less than it could, forcing governments to lean harder on the businesses that are visible and compliant, which further distorts the incentive to formalise. The tax reform agenda that has consumed the past two years of federal policy, including the harmonisation of levies and the simplification of collections that took effect this year, was designed to break precisely this cycle, by making taxes fewer, clearer and payable through digital channels that reduce the discretionary contact that invites informal levies.

Building the fiscal contract

What the survey's findings suggest is that the binding constraint on Nigeria's revenue mobilisation is no longer identification of taxpayers, a problem numbers and digital infrastructure have largely solved, but the credibility of what happens after identification. Governments that want more than grudging compliance have to be seen to return value: roads, schools, security and the visible expression that taxation is a contribution to a shared project rather than a toll extracted at a checkpoint. Trust is the currency of that exchange, and the survey finds it in deficit.

The household findings imply specific priorities. Formal levies that survive on the books should either be legalised, with transparent schedules and receipts, or scrapped. Digital collection channels that bypass cash-handling intermediaries reduce the opportunities for arbitrary charges. And the publication of what tax revenue funds, at the level where taxpayers can see it, converts an abstraction into evidence. None of these steps is technically difficult; all of them depend on the political will of the state and local governments whose agents collect the informal charges in the first place.

The survey's release at the summit gave Nigeria's fiscal authorities a clear reading of the mandate they hold. Three quarters of households accept the state's right to tax them, a foundation stronger than many developing economies can claim. The same survey tells them why compliance does not follow consent, and the answer lies not in rates but in trust. As the federal government's tax reform agenda moves through its implementation phase, that gap, between acceptance and confidence, is the number it has to close.