Tax: Why Should I Pay Tax?

By: Olamilekan Oke

Taxation is one of those topics that was treated under economics as a subject back then in secondary. The definition of taxation was quite simple, to the point that it was easy to memorize it then. But, if you didn’t take economics in secondary school, here is the simple definition of taxation: Tax is the money imposed by the government on all citizens. That is, it is the money citizens pay to the government every month. So, taxation is the act of paying tax. Just like the way you pay 10% of your earnings as tithe in church, you also pay a certain amount of money to the government.

Taxation is one of the ways government generates revenue for herself; tax payers money are used to build infrastructures, clinics, roads, provide power supply, social amenities and all needed by the citizens.


Tax payment is legal and also part of our civic duty as citizens. Although, there are different types of taxes in Nigeria. Some of which are: personal income tax, companies income tax, Value Added Tax, capital gain tax, etc.

Everyone in Nigeria pays tax, either directly or indirectly, as a reader you just paid a tax on that FreshYo yogurt you just bought. That is called Value Added Tax (VAT). Every citizen working with the government, private agency, owner of a business or just a petty trader is expected to pay tax. Yes, you sell vintage shirts online, you are expected to pay your tax to the government.

In fact, you’re expected to pay 25% of your monthly income to the government (personal income tax).


Oh, Yes! People pay tax in Nigeria, but just barely a quarter of the entire population pay their taxes. According to the chairman of Federal Inland Revenue service (FIRS), Muhammad Nami, only 40 million out of 200 million Nigerian population pay their taxes. Research shows that only those who are either government workers or people who work with well-established firms pay their taxes in Nigeria. This is bad.


This is the question most people ask whenever you tell them to pay their taxes. This is actually true because corruption has eaten deep into governmental systems in Nigerian. What do they do with tax payers’ money? They squander the money, use it for their personal gain, save it up in the United States like Abacha did and leave the citizens to suffer.


  1. Poverty: Most people don’t even have money to put food on their table! How do you expect the poor to pay tax
  2. Unemployment: Someone who is unemployed doesn’t have a job to pay his or her tax from. The government is at the losing end here.
  3. Ignorance: Not everyone in Nigeria knows what taxation is about and that means they do not know that they’re expected to pay a certain amount of money to the government.


  1. Government should make people see a need to pay tax. You’ll agree with me that most people don’t see a need to pay tax because they believe the money will go into one potbellied politician’s account. If citizens know that the money will be used to provide amenities, they’ll pay.
  2. Sensitization is never enough, organize seminars or events that will make people understand what taxation is all about and why they need to pay.
  3. If government does the needful (using tax payers money properly), people will change their attitudes towards tax payment.

Do you own a business? You should pay your tax! We know Nigeria is bad, but for us to witness growth and advancement like other nations, we need to take taxation seriously. One of the reasons you should pay your tax is because that’s one of the avenues government generates revenue.  That’s how Nigeria can become an advanced country; we both how tax payment is taken seriously in countries outside Nigeria. Once you graduate and get a good paying job, please do make sure you pay tax.


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