TAX REFORMS AND NIGERIA’S NEW SOCIAL CONTRACT

The recent 10-point statement by Zacch Adelabu Adedeji, Executive Chairman of the Nigeria Revenue Service (NRS), offers a glimpse into a forward-thinking roadmap for the agency. It represents a fundamental pivot from aggressive enforcement to strategic “taxing of prosperity, not poverty.”

At its core, the mandate collapses the old, fragmented system into a single “system integrator” for all federal intake – from oil royalties to solid minerals. Most importantly, it shields small businesses with turnovers under ₦50 million from the tax net entirely, protecting the backbone of our economy. By leveraging data-driven tools like the National e-Invoicing system and phasing corporate tax rates down to 25%, the NRS aims to realize its ₦40.7 trillion target. This will be achieved not by adding new burdens, but by broadening the base and eliminating the nightmare of multiple taxation. The goal is simple: to ensure Nigeria’s fiscal architecture supports investment rather than stifling it.

Ever since Rousseau first framed the ‘social contract’ back in 1762, it has remained the ultimate deal between the state and the street: a trade-off where we surrender absolute freedom for the collective safety of the law. It creates the only moral mandate for taxation. The people bankroll the state, and the state, in return, underwrites a civilized existence. Without this pact, no democracy can hold its ground; the system simply lurches from turbulence into total chaos.

Basically, the goal of political activity is to redefine the debate. Whatever reservations some may hold, these tax reforms – now increasingly accepted as conventional wisdom – represent a significant leap forward. Undoubtedly, this initiative reinstates a social contract long truncated by consistent interruptions to our democratic process and the rise of the ‘Gun Hegemony.’

President Bola Ahmed Tinubu has secured his place as a key figure in Nigeria’s post-independence history; he has fundamentally shifted the territory of the national discourse. He has taken significant risks, embodying the spirit of the British Special Air Service (SAS) motto: ‘Who Dares Wins.’ By daring to remould public opinion, the president has already secured his victory.

I have argued elsewhere about a more edifying past: the fact that over six decades ago, Nigeria possessed a social contract that served as the state’s operating ethos. Recalling this history is vital because, as Cicero famously warned, to be ignorant of what occurred before you were born is to remain forever a child. The Western Region of the 1950s provides a striking example of the social contract in action. To fund its ambitious programmes, Chief Obafemi Awolowo’s Action Group (AG) government levied taxes that many adults in the region viewed as punitive. The political cost was immediate and severe: the regional government was routed in successive local and federal elections.

It is to the credit of that government that it looked beyond the next election – a truly statesmanlike approach. History would eventually vindicate Awolowo and the AG government before their ‘korokoro’ eyes. By 1961, tax riots erupted across the Western Region, leading to the arrest of 386 people for disorderly conduct. Even by today’s standards, nearly four hundred arrests in a single day is a staggering figure.

The political sophistication displayed in Western Nigeria in 1961 remains virtually unmatched, even by today’s so-called advanced democracies. It is a history we should hold with pride. These citizens were not demonstrating against the imposition of taxes; rather, they were protesting the government’s attempt to cut taxes simply to curry favour with the electorate. Such a high level of civic awareness remains extraordinary, even decades later.

The people of the Western Region in 1961 were sophisticated enough to realize that tax cuts would inevitably erode health, education and social services; they didn’t need degrees in Applied Economics to foresee the consequences. When the regional government was forced to back down, it illustrated a profound acceptance of the civic awareness and social contract as the essential glue between the state and its people. Today, Tinubu has successfully reinstated this contract without testing the tempers of the riots of the past. It is a masterstroke of tactical governance that will likely be studied in political science departments for years to come.

At the president’s direction, what Adedeji’s team has pulled off isn’t just tax reform, it’s a total reimagining of the social contract. It has moved so fast that taxation, once a guaranteed flashpoint, will probably be a non-factor in the next election. It was a close call, though. Without this tactical pivot, the ruling All Progressives Congress (APC) would have handed the opposition a loaded weapon – and we can be sure they wouldn’t have hesitated to pull the trigger.

Abiodun Komolafe, ijebujesa@yahoo.co.uk.