…Melaye threatens legal action
A growing national backlash is trailing President Bola Tinubu’s proposed tax reforms as labour unions, civil society groups, opposition figures and a former senator raise economic, transparency and constitutional concerns over the government’s fiscal agenda.
At the centre of the controversy is the planned increase in Value Added Tax (VAT) from 7.5% to 12.5 per cent in 2026, with a further rise to 15% by 2030. The proposal has drawn sharp criticism from Nigerians who argue that higher consumption taxes will deepen hardship for low-income earners and small businesses already struggling with inflation, unemployment and rising living costs.
The Nigerian Labour Congress, (NLC), alongside several civil society organisations, has described the reforms as “inhumane,” accusing the Federal Government of shifting the burden of fiscal mismanagement onto citizens. Social media campaigns and threats of nationwide protests have intensified, reflecting widespread public anger. Despite the opposition, the Tinubu administration has insisted the reforms are necessary to ensure fiscal sustainability and boost government revenue.
The tax reform debate has been further complicated by concerns over transparency in international tax agreements. Former Labour Party presidential candidate, Peter Obi, yesterday called on the Federal Government to publish the full details of the tax cooperation Memorandum of Understanding (MoU) signed between Nigeria and France. Obi warned that secrecy surrounding revenue-related agreements could erode public trust, especially at a time of severe economic strain.
While acknowledging that international cooperation in tax administration is not inherently wrong, Obi stressed that any agreement involving taxation, data management and public revenue must be transparent and clearly explained to Nigerians. He questioned the need for heavy reliance on foreign expertise, noting that Nigeria already has a robust pool of tax professionals and advisory firms capable of driving reforms internally.
According to Obi, with over 60 per cent of Nigerians living in multidimensional poverty and small businesses weighed down by multiple taxes, fiscal policies must prioritise fairness, accountability and measurable benefits. He urged the government to clearly outline the objectives, scope and expected gains of the Nigeria–France tax pact to restore public confidence.
Adding a legal dimension to the unfolding crisis, former senator and lawyer, Dino Melaye, has threatened to sue the National Assembly over VAT provisions contained in the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025. In a pre-action notice served on the 10th National Assembly, Melaye argued that the laws unconstitutionally vest legislative and administrative authority over VAT in the Federal Government.
Melaye contended that VAT is not listed under either the Exclusive or Concurrent Legislative Lists in the 1999 Constitution, and therefore falls within the residual legislative powers of the states. He warned that unless the VAT provisions are withdrawn within three months, he would approach the courts to seek declarations nullifying the laws and restraining the Federal Government from administering VAT.
The former Kogi-West senator is also demanding the refund of VAT revenues already collected under the disputed provisions to affected state governments, insisting that only state Houses of Assembly have the constitutional authority to legislate on VAT.
