By Princess Gloria Adebajo-Fraser MFR.
Nigeria is undergoing a quiet but consequential transformation in its fiscal governance. Without sirens, threats, or mass enforcement exercises, the country is moving into an era of data-driven taxation — a system already standard across advanced and emerging economies.
Recent comments by Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, have brought this shift into sharper focus. In a public interview, he stated:
“We are no longer relying on people to be honest and patriotic to declare their income. We are now using the system to validate what you declare.”
This is not an extraordinary declaration. It is, in fact, a long-delayed alignment with global best practice.
Fiscal Discipline Through Deductions: A Global Norm, Not a Nigerian Innovation.
Contrary to public anxiety, Nigeria is not inventing a punitive tax mechanism. Automated reconciliation, account substitution, and system-led deductions are routine tools in modern tax systems.
In the United Kingdom, HM Revenue & Customs (HMRC) adjusts tax liabilities automatically when discrepancies arise.
In the United States, the Internal Revenue Service (IRS) issues automated compliance notices and can levy bank accounts after due process.
In Canada, Australia, Germany, and South Africa, unexplained income gaps trigger structured recovery — not personal intimidation.
As the OECD notes:
“Effective tax systems rely on third-party data, automated reconciliation, and proportionate enforcement to ensure compliance and fiscal sustainability.”
— OECD, Tax Administration 3.0 Framework.
Nigeria is not becoming harsh. It is becoming standard & normal.
From Guesswork to Systems: How Tax Intelligence Works.
Under the new framework, individuals and businesses still self-declare income. However, declarations are validated against verifiable data across the economic ecosystem, including:
Bank and card transactions.
Travel and immigration records.
Electricity and utility consumption.
Telecommunications and digital activity.
Invoices and transaction trails.
Lifestyle spending indicators.
When spending consistently exceeds declared income, the system asks a single question:
“Please explain the source of this expenditure.”
No shouting.
No harassment.
No guesswork.
Just documentation.
Fiscalisation: Ending Invisible Transactions.
A central pillar of the reform is fiscalisation — the automatic transmission of invoice data to tax authorities when transactions occur.
Countries that implemented fiscalisation saw dramatic results:
Italy reduced VAT evasion by billions of euros.
Brazil expanded compliance through electronic invoicing.
Turkey widened its tax base using real-time transaction reporting.
For Nigeria — where over 60% of economic activity remains informal — fiscalisation is not optional. It is foundational.
Trade, Customs, and the Missing Link: Why ICTN Is Critical.
To fully succeed, experts argue that Nigeria’s tax reform must be reinforced at the borders.
It is therefore urgent for the Federal Government to adopt and operationalise the Eden Frabemar-recommended ICTN (International Cargo Tracking Note) as an integral support system for the new tax regime.
ICTN provides end-to-end visibility on imports and exports, capturing:
Cargo value and origin.
True transaction pricing.
Importer and exporter identities.
Trade routes and shipment consistency.
In countries where ICTN-style systems are active, customs leakages collapse, under-invoicing declines, and trade-based tax evasion becomes far more difficult.
Without ICTN, Nigeria risks building a strong internal tax system while leaving external trade — one of the largest revenue leak points — insufficiently monitored.
For exporters and importers, ICTN ensures:
Accurate duty and tax assessment.
Reduced smuggling and false declarations.
Fair competition and compliance.
For government, it means billions in recoverable revenue that can no longer disappear at the ports.
Why the Resistance? A Demographic Reality.
Much of the backlash against tax reform stems from misunderstanding rather than malice.
Nigeria faces a stark demographic challenge:
An estimated 85% of Nigerians are semi-literate or functionally illiterate
Only a small percentage fully understand taxation, fiscal systems, or public finance.
This knowledge gap fuels fear, misinformation, and emotional opposition — especially on social media.
As Christine Lagarde, President of the European Central Bank, has observed:
“Strong institutions and effective taxation are the foundation of stable economies and inclusive growth.”
Tax reform fails when people are not educated about its purpose.
Targeted, Not Predatory.
The system does not target low-income earners. Mr. Oyedele made this clear:
“If someone earns ₦50,000 and spends ₦90,000, it is not worth pursuing.”
Focus areas are:
Large unexplained income gaps.
High-value lifestyle inconsistencies.
Profitable actors operating outside structure.
This is about discipline, not oppression.
Strategic Sectors, Strategic Revenue.
A functional tax system unlocks enormous value from sectors such as:
Oil & Gas.
Solid minerals and mining.
Banking and financial services.
Telecommunications.
International trade and logistics.
In advanced economies, these sectors fund:
Education
Healthcare
Social welfare
Infrastructure
In Nigeria, weak taxation has forced dependence on borrowing, even while multinational and domestic giants generate substantial profits locally.
Conclusion: From Borrowing to Building
Nigeria’s tax reform is not punishment. It is nation-building.
With tax intelligence, fiscalisation, ICTN-enabled trade monitoring, and reduced human discretion, Nigeria can finally fund development from its own economy, not debt.
The message is simple:
Structure your income
Keep records.
Declare correctly.
Stop hiding behind opacity.
The era of “coding” the system is ending.
The era of systems coding reality has begun.
Nigeria is not doing anything unusual.
Nigeria is doing what works.
Princess G. Adebajo-Fraser MFR.
The National Patriots
