Ex-NERC Chair Amadi Faults Tax Reforms, Flags Legal, Economic Risks

Folalumi Alaran in Abuja

Former Chairman of the Nigerian Electricity Regulatory Commission (NERC) and Director of the Abuja School of Social and Political Thought, Dr. Sam Amadi, has criticised the federal government’s tax reform drive, warning that poorly conceived taxation could undermine economic growth, worsen poverty and erode state legitimacy.

Speaking on Thursday in Abuja at a quarterly policy roundtable, Amadi said the suspension of the controversial tax measures was justified, arguing the policy is riddled with constitutional, economic and social flaws.

According to him, taxation is not merely a revenue-raising tool but a core element of constitutional governance and state legitimacy.

“Tax is not about mopping up money,” Amadi said. “Even in private markets, you sell value before you make money. A country makes money because it delivers value to citizens. Tax must therefore follow constitutional due process.”

Amadi warned that allegations of forgery or alteration of tax laws alone were sufficient grounds to halt implementation, stressing that taxation powers flow from constitutional political economy, not technocratic fiat.

“If you take a tax law and forge it or alter it, then everything is zero,” he said.

He faulted what he described as a narrow fiscal mindset among government officials, focused solely on how much revenue government can extract, rather than how well it is used.

The former regulator cautioned that higher tax rates in a low-income, high-inflation economy could depress growth by shrinking the tax base and discouraging productivity.

“This tax may look like a blessing, but in reality, it can lead to low income, a smaller tax base and higher multidimensional poverty,” he noted.

He added that Nigeria’s constitution demands a balance between efficiency and equity, warning that aggressive taxation of the middle class would have unintended consequences.

Amadi argued that taxing the middle class heavily amounts to indirectly taxing the poor, since Nigeria lacks a formal social security system.

“The poor in Nigeria are informally protected by the middle class. When you tax the middle class massively, you destroy their capacity to support dependents, and you end up increasing poverty,” he said.

He warned that excessive taxation could discourage investment, wealth creation and informal social transfers that sustain millions of Nigerians.

While acknowledging that the Tinubu administration has expanded Nigeria’s fiscal space, including raising the tax-to-GDP ratio, Amadi questioned the developmental outcomes.

“The question is not how much more money government makes, but how well it uses it. Are we seeing improvements in human development, poverty reduction, productivity or GDP growth of states?” he asked.

He criticised rising cost of governance, persistent waste and weak accountability frameworks, citing unimplemented audit reports and unchecked expenditure.

Beyond tax to public finance reform, Amadi concluded that Nigeria’s economic growth path should not rely primarily on taxation but on productivity expansion, prudent expenditure and efficient public finance management.

“You cannot stand on one leg. Public finance is not just revenue; it is also expenditure, accountability and social welfare,” he said.

He called for broader, multidisciplinary engagement in tax policy design, rather than leaving such critical decisions solely to financial experts.