The Director of the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development, Iyabo Masha, has said Nigeria’s new tax laws will support the country’s transition into a more modern and efficient economy.
Masha, the first African to occupy the position since the establishment of the G-24 more than five decades ago, spoke at a press conference in Abuja ahead of the group’s meeting.
She emphasised that tax reform and domestic resource mobilisation are central to sustainable development. According to her, Nigeria’s ongoing reform efforts could deepen formalisation of the economy and strengthen public finances over time.
“Tax and domestic resource mobilisation are fundamental to economic development,” she said.
Masha explained that taxation enables governments to provide essential services such as infrastructure, education and healthcare, while also maintaining law and order.
She noted that governments typically finance development through taxation, borrowing or asset sales. However, she argued that taxation remains the most efficient option with the least risk of macroeconomic destabilisation.
“Out of all of these, taxation is the most efficient one that leads to the least macroeconomic destabilisation,” she stated.
The G-24 director observed that many developing countries struggle with weak tax mobilisation. In some cases, tax revenue accounts for as little as seven per cent of Gross Domestic Product, compared to 25 to 30 per cent in more advanced economies.
Reflecting on Nigeria’s reform journey, Masha disclosed that in her previous role she reviewed the country’s tax framework and found it to be highly fragmented. She added that weak implementation had contributed to low revenue mobilisation.
She said ongoing reforms could address structural gaps in the tax system, improve compliance and enhance government revenue over the long term.
Analysts say improved tax administration and broader compliance could reduce reliance on borrowing and help stabilise Nigeria’s fiscal position.
