Taxing high‐net‐worth individuals in Nigeria: Challenges and opportunities for policy‐makers from a preliminary investigation

Giovanni Occhiali, Jalia Kangave and Hamza Ahmed Khan

Development Policy Review, 2025, vol. 43, issue 2

Abstract: Motivation Nigeria ranks third in Africa for the number of US dollar millionaires, but whether these high‐net‐worth individuals (HNWIs) are contributing their fair share to domestic revenue mobilization is open to question. Although there have been various attempts to improve tax collection in recent years, including the establishment in 2023 of a presidential committee to harmonize fiscal policy across the country's 36 states, some of which are developing compliance strategies for wealthy individuals, very little is known about the impact of these reforms. Purpose To understand what approaches are currently prevalent to improve HNWI compliance across Nigeria and whether they are perceived to be effective. Methods The study is based on 12 semi‐structured interviews with public and private stakeholders from North East Nigeria, analysis of federal and state‐level legislation, data collected from 10 State Boards of the Internal Revenue Service from all Nigerian geopolitical zones in preparation for a two‐day workshop on HNWIs, and discussions with the 26 participants in the workshop. Findings Despite the great diversity in the economic and social structures of the states of Nigeria, legal, administrative, and political challenges faced by the State Boards of the Internal Revenue Service are very similar. Different states have passed subnational legislation that introduces requirements over and above those present in federal legislation to collect the information required to identify HNWIs. However, enforcement is made complex by low tax morale amongst the citizenship and political interference in tax administrative processes. These trends are then discussed in more depth for the particular case of Borno State. Policy implications Given the similarities between the obstacles faced by State Boards of the Internal Revenue Service in taxing HNWIs, there is scope for promoting regional approaches coordinated by the Nigerian Joint Tax Board. More evidence needs to be gathered on the effectiveness of policy measures implemented by particular states and the sharing of experiences across State Boards of the Internal Revenue Service needs to be facilitated.

Date: 2025
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