5 Ways the New Tax Law Will Make Life Worse for Everyday Nigerians in 2026
As Nigeria enters 2026, many citizens are already exhausted — financially, mentally, and emotionally. The removal of fuel subsidy in 2023 triggered a chain reaction of inflation, rising transport costs, food price hikes, and shrinking purchasing power. Just when Nigerians hoped for relief, the Federal Government moved ahead with a new tax law, promising reform, efficiency, and increased revenue.
But for everyday Nigerians, this tax reform feels less like progress and more like another layer of hardship.
Here are five clear ways the new tax law is likely to make life worse for ordinary Nigerians in 2026, based on policy design, economic realities, and lived experience. Eyes Of Lagos reports,
1. Higher Penalties Will Hit Small Businesses the Hardest
One of the most troubling aspects of the new tax law is the increase in penalties for non-compliance. While government officials argue that tougher penalties will improve compliance and boost revenue, the reality on the ground tells a different story.
According to tax advisory firms like PwC, the reforms introduce stricter enforcement, tighter deadlines, and heavier sanctions for late filings or incorrect returns. For small businesses and self-employed Nigerians, this is dangerous territory.
Most SMEs in Nigeria:
Operate with thin profit margins
Face unstable electricity supply
Pay high transport and logistics costs
Lack access to professional tax consultants
For a small shop owner in Lagos, a fashion designer in Aba, or a food vendor in Benin City, missing a filing deadline is no longer a minor mistake — it could mean fines that wipe out months of profit.
In an economy where businesses are already struggling to survive, higher penalties risk forcing more SMEs to shut down, increasing unemployment rather than growing revenue.
2. Expanded Tax Base Means Informal Workers Are Now in the Crosshairs
The government has made it clear: the tax net is expanding.
In theory, broadening the tax base sounds fair. In practice, it means millions of informal workers may now be targeted — people who have never earned stable income or enjoyed government support.
This includes:
Market traders
Artisans and craftsmen
Ride-hailing drivers
Freelancers and gig workers
Roadside vendors
These Nigerians already pay indirect taxes every day through:
VAT on food and goods
Transport fare increases
Levies and multiple local government charges
Bringing them formally into the tax system without fixing income instability, inflation, and social protection feels like punishment, not reform.
For many, the question is simple:
How do you tax people who are barely surviving?
3. Digital Tax Reporting Excludes Millions Without Access
Another major feature of the new tax law is increased reliance on digital reporting and online compliance systems. While digitisation may improve efficiency on paper, Nigeria’s reality makes this approach deeply problematic.
Millions of Nigerians still struggle with:
Poor or non-existent internet access
High cost of mobile data
Low digital literacy
Frequent power outages
Expecting traders in rural areas or low-income urban communities to comply with online tax portals and digital documentation creates a system that is exclusionary by design.
Those who cannot comply digitally risk:
Being labelled non-compliant
Facing penalties and fines
Becoming vulnerable to harassment or extortion
A tax system that many citizens cannot practically access only widens inequality and deepens mistrust.
4. Tax Burden + Subsidy Removal = Higher Cost of Living
Perhaps the most painful impact of the new tax law is how it compounds existing hardship caused by subsidy removal and inflation.
Since fuel subsidy removal:
Transport fares have doubled or tripled
Food prices have skyrocketed
Electricity tariffs have increased
Rent and basic services cost more
Now, with higher taxes and compliance costs, businesses are left with only one option: pass the cost to consumers.
This means:
Higher food prices in markets
Increased transport fares
More expensive services
Reduced purchasing power
In simple terms, even Nigerians who don’t directly pay the tax will still suffer its effects.
The tax does not exist in isolation — it stacks on top of an already unbearable economic reality.
5. No Clear Guarantee of Better Services in Return
At the heart of Nigeria’s tax resistance problem is one issue: trust.
Citizens are not just angry about paying tax — they are angry because there is no clear evidence that taxes translate into better living conditions.
After subsidy removal, Nigerians were promised:
Better public transport
Improved healthcare
Education investment
Social safety nets
Years later, many are still asking: where did the money go?
With the new tax law, the same doubts resurface:
Will roads improve?
Will hospitals work better?
Will electricity become stable?
Will insecurity reduce?
Without transparency, accountability, and visible impact, taxation begins to feel like extraction without representation.
Conclusion: A Reform Without Relief
Tax reform is not inherently bad. Every functional country needs revenue to operate. But timing, trust, and fairness matter.
Introducing a tougher tax regime:
After subsidy removal
Amid record inflation
With rising unemployment
And shrinking household income
…creates the perception of a government out of touch with its people’s pain.
If the Nigerian government wants citizens to embrace taxation, it must first:
Reduce waste and corruption
Show clear use of public funds
Provide relief and safety nets
Communicate honestly with the people
Until then, many Nigerians will continue to see the new tax law not as reform — but as another burden in an already heavy life.