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Nigeria’s ongoing tax reforms could help shift the country toward a more formal and fiscally stable economy if consistently implemented, according to Iyabo Masha, director of the Intergovernmental Group of Twenty Four on International Monetary Affairs and Development.
Masha spoke at a press briefing in Abuja ahead of a meeting of the G 24, a coalition of developing countries that coordinates policy positions on global financial and monetary issues.
She said improved taxation and domestic revenue mobilisation would play a central role in strengthening Nigeria’s public finances and supporting long term economic development.
“Tax and domestic resource mobilisation are fundamental to economic development,” she said, explaining that government revenue raised through taxes underpins public services such as infrastructure, education, healthcare and security.
The G 24 director noted that governments typically rely on three primary sources of financing, taxation, borrowing and asset sales. Of these, she said taxation is the most sustainable because it avoids the debt burdens and macroeconomic risks associated with heavy borrowing or the one off nature of asset disposals.
“Out of all of these, taxation is the most efficient one that leads to the least macroeconomic destabilisation,” she added.
Nigeria is currently pursuing a range of fiscal reforms intended to broaden the tax base, improve compliance and increase non oil revenue. Authorities have said the changes are necessary as the country faces pressure from rising public spending needs, population growth and fluctuating oil earnings.
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Masha said strengthening revenue collection could gradually formalise economic activity by encouraging businesses and individuals to operate within regulated structures, improving transparency and accountability across the economy.
A more reliable tax system, she added, would allow government planning to move away from dependence on volatile commodity income.
She observed that many developing economies struggle to mobilise sufficient domestic revenue. In some cases, she said, tax collection amounts to about seven percent of gross domestic product, far below the levels seen in more advanced economies where government revenue can reach 25 to 30 percent of GDP.
Drawing on her earlier work examining Nigeria’s fiscal structure, Masha said the country’s tax framework had historically been fragmented, with overlapping authorities and uneven implementation contributing to weak revenue performance. She suggested reforms aimed at streamlining administration and clarifying responsibilities could improve efficiency over time.
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She also noted that stronger tax collection would expand fiscal space, enabling governments to fund social services and investment without relying excessively on external borrowing.
For developing countries, she said, domestic revenue remains one of the most reliable tools for financing development priorities.
The G 24 meeting in Abuja will bring together finance officials and policymakers from member states to discuss global financial conditions, development financing and coordination of positions within international institutions.
Nigerian authorities view hosting the discussions as an opportunity to highlight fiscal reform efforts and engage partners on broader economic cooperation.
Masha said the success of the reforms would depend not only on legislation but on consistent enforcement, administrative capacity and public trust in how tax revenues are used.
Over time, she said, improved collection and transparency could support economic diversification and help stabilise government finances.
