Nigeria has a population of over 170 million and is Africa’s largest economy, with a GDP of 521 billion USD and an annual growth rate of 5.4% in 2013. The government debt amounted to 19% of the GDP in that same year. In spite of the relatively large economy, 33.1% of the country’s population falls below the national poverty line. The tax-to-GDP ratio is currently at 14%.
The country is richly endowed with natural resources and this, combined with poor tax policies, has resulted in the fact that oil tax constitutes 73% of government revenues. The makes the country largely dependent on extractive revenues and vulnerable to the fluctuations of international prices. As part of new efforts at diversifying revenue sources there now is renewed emphasis on taxation.
The tax administration system in Nigeria is characterized by a low capacity and low level of enforcement as well as is suffering from leakages arising from corruption of tax officials, under assessments, under-filing, and under-reporting. A policy for the collection of tax from the informal sector is lacking, resulting in a wide tax gap and general low levels of tax compliance.
Recently, the Federal Ministry of Finance has commenced a participatory process of establishing a Presumptive Tax Regime to effectively tax the informal sector, while Nigeria’s Joint Tax Board (JTB) has commenced the process of harmonizing the various (about 85) different taxes levied across the federation to avoid multiple taxation and criminalizing the collection of taxes by non-statutory bodies. The introduction of a Tax Identification Number (TIN), which allocates a number to an individual as a condition for participation in certain economic activities, has brought previously excluded persons into the tax net.
Due to the dwindling revenue collected from the extractive sector, the Nigerian government is planning to tax luxury goods such as private jets, yachts, alcoholic beverages and expensive cars. This is likely to be translated into policy with the 2015 annual appropriation Act.

CRAFT Country Strategy

During the first phase of the CRAFT program in Nigeria, a publication and dissemination of a Baseline Study on the Nigerian tax system was delivered, as well as two policy briefs on Maximizing tax from the Extractive Sector and Expanding the Tax base in the Informal Sector in Nigeria.
A national platform on fair taxation was established, the Tax Justice & Governance (TJ&GP), together with Oxfam in Nigeria, Actionaid Nigeria, Christian Aid and other local NGOs. The platform hosted a forum of Pan African civil society during the African Union Finance Ministers meeting held in Abuja in 2014 as well as the World Economic Forum on Africa held in Abuja in May 2014.

Strategy 2015-2018

Oxfam is planning the development of a documentary using Onitsha and Aba (two areas with a high level of market economy/informal sector activities) as case studies to showcase what is happening in the sector and build credible data for local campaigns on tax justice.
Further, we would like to offer two different training programmes on tax research for evidence based advocacy as well as a training on campaigns and citizen mobilization.
As part of our policy advocacy work, we will reach out and build alliances with labour movements and trade associates, and strengthen these groups at the state level to undertake advocacy work to promote policy changes and establish grievance mechanisms between tax payers and the revenue authorities.

Lead Organization

CISLAC is a non-governmental, non-profit legislative advocacy, lobbying, information sharing and research organization in Nigeria.