photo credit: Nigeria’s currency notes online
By Miracle Adebayo
Nigeria’s tax system is entering a pivotal moment as the Federal Government rolls out a new set of tax reform policies. While some critics have labelled this development as the ‘2025 Tax Doom,’ there is an urgent need to educate Nigerians on what these reforms truly mean for their income and livelihoods. Is it really a fiscal doom or an opportunity for a fairer, more accountable system?
With this new suite of tax-reform legislation underway, the role of the country’s youth, undergraduates, and current corps members is no longer peripheral but central to the success of Nigeria’s fiscal transformation.
The Compliance & Knowledge Gap
Despite being Africa’s most populous nation, Nigeria continues to struggle with deep deficits in tax awareness and compliance. A recent report by PwC Nigeria observed that Nigeria’s tax-compliance rate is “significantly low compared to other countries… especially given the weak revenue administration capacity and lack of data around the informal sector.”
According to the National Bureau of Statistics (NBS), Nigeria’s tax-to-GDP ratio (that is, all tax revenue as a share of GDP) stood at 10.86% in 2021. This places Nigeria well below the average for Africa, and markedly short of international benchmarks.
A 2024 article reported that the International Monetary Fund (IMF) estimated Nigeria’s tax-to-GDP ratio at just 9.4% in 2023. These figures suggest that large swathes of the economy, especially the informal sector, young professionals, and micro-entrepreneurs, remain outside the formal tax net or poorly engaged in it.
One policy brief by ActionAid Nigeria emphasised that improving youth tax literacy is “an important objective in taxpayer-education programmes” to boost accountability and revenue mobilisation.
In short: low awareness + limited trust in institutions + administrative complexity = tax system underused.
Youth Engage in the Tax Reform Narrative
In recognition of the magnitude of the challenge and the opportunity that young Nigerians represent, the Federal Government has rolled out a fresh initiative: the Tax Reform Challenge for Students. This nationwide competition targets tertiary students and recent incomers into the workforce (including corps members eligible for the National Youth Service Corps) and invites them to study the newly enacted tax laws and create content (articles, videos, podcasts, social-media posts) between July 1 and December 31, 2025.
With a prize pool of ₦10 million, various gadgets, internships, and ambassadorial roles on offer, the initiative seeks to raise fiscal literacy, spark youth dialogue on tax policy, and ensure that the next generation of Nigerians actively shapes the future of national revenue reform.
Making Tax Education Accessible
For many Nigerians, especially the young, taxation remains shrouded in jargon and complexity, seen as the domain of accountants, economists, or civil servants. The Challenge is thus designed to shift that perspective by empowering students to interpret the new tax framework and explain it in formats that resonate with their peers via blogs, Instagram reels, YouTube shorts, and even podcasts.
Experts say that doing so bridges the gap between ordinary legislation and everyday citizen relevance. A survey cited by the initiative found that only around 45% of young adults aged 18–35 said they felt confident about understanding tax procedures, meaning a majority remain unclear about their obligations. By asking youth to translate complex tax policies into digestible content, the programme seeks to make tax education not only accessible but engaging and relevant.
Youth at the Forefront of Fiscal Literacy and Economic Reform
The Competition does more than reward creativity: it opens up a space for youth voice in a fiscal reform agenda that has historically been top-down. Participants are encouraged not only to explain the law but also to propose critiques and reforms, thereby activating young Nigerians as constructive contributors to tax-policy evolution.
From an economist’s vantage point, strengthening tax literacy among youth can have broader economy-wide implications. With better-informed citizens, revenue bodies can reduce reliance on borrowing, improve equity in tax burdens, and spark entrepreneurship and financial awareness among younger professionals and small business owners.
From Culture Shift to Accountable Economy
Beyond the immediate prizes, the deeper value of this initiative lies in its potential to drive a long-term cultural change: turning taxation from a perceived burden into a shared tool for progress. The tax-to-GDP ratio remains a central metric of concern: Nigeria’s target is to move from under 10% to 18% within three years, according to the Taiwo Oyedele-led tax-reform committee.
Cultivating early tax literacy among youth may be the catalyst that helps shift behaviour, strengthen voluntary compliance, and boost civic participation: seeing tax not as punishment but as investment in roads, schools, health, and in youth opportunity.
What This Means for Youth, Small Businesses, and Early-Career Nigerians
For Nigeria’s under-35 population, which accounts for the vast majority of the workforce and enterprise base, the timing is crucial. With youth unemployment high and informal economic participation dominant, building tax awareness offers dual benefits: fulfilling civic obligations and enhancing individual financial and entrepreneurial literacy. A better-informed young person is more likely to start a business, keep records, register formally, and understand where tax fits in.
For small-scale entrepreneurs and early career professionals, the reforms promise streamlined processes, clearer exemptions, and, if awareness is built, reduced costs of non-compliance. The initiative thus aligns citizen literacy with policy delivery.
Moving Forward: From Challenge to Change
The Tax Reform Challenge is not a silver bullet, as structural issues remain: informal sector size, institutional trust, enforcement capacity, administrative burden, and data systems. For example, studies show that SMEs (which dominate the informal economy) often escape formal tax nets due to registration barriers, multiple taxation, and weak enforcement.
But by engaging the youth demographic now, the government is signalling a shift: tax reform will not just be about new laws and revenue targets, it is also about building a citizen base capable of understanding and participating in fiscal policy.
If successful, this could translate into better civic engagement, higher voluntary compliance, improved government accountability, and ultimately a more sustainable revenue base.
Conclusion
In a country striving for economic resilience and social equity, empowering the youth to be active stakeholders in tax reform is arguably one of the most transformative moves yet. Through the Tax Reform Challenge, Nigeria is placing young people not at the sidelines but at the centre of its fiscal future. For them, the story is not just about paying tax; it is about shaping the system, holding it to account, and owning their place in national development.