The Nigerian Tax Crisis: Federal Government Sued at ECOWAS Court Over Alleged "Doctored" Tax Laws

 

​A legal storm is brewing across West Africa as the Nigerian Excellence for Good Governance and Accountability (NEFGAD) has officially dragged the Federal Government of Nigeria before the ECOWAS Community Court of Justice. The lawsuit, filed on February 24, 2026, alleges that the Nigerian government implemented versions of four critical tax reform acts that were "clandestinely altered" after being passed by the National Assembly. This development has sent shockwaves through the business community, raising fundamental questions about the rule of law, legislative integrity, and the future of Nigeria's fiscal landscape.

​The Core of the Dispute: Allegations of Legislative Sabotage

​The controversy centers on four landmark pieces of legislation that were intended to overhaul Nigeria's revenue system:

1. ​The Nigeria Tax Act, 2025
2. ​The Nigeria Tax Administration Act, 2025
3. ​The Nigeria Revenue Service (Establishment) Act, 2025
4. ​The Joint Revenue Board (Establishment) Act, 2025

​While these laws were meant to modernize tax collection and stimulate economic growth, NEFGAD and several lawmakers—including the House Minority Caucus—claim that the versions gazetted and implemented on January 1, 2026, contain provisions never approved by the legislature.

​Key Discrepancies Identified

​The legal challenge highlights several "unauthorized" insertions that have significantly increased the burden on taxpayers and expanded the powers of the state:

• ​Mandatory Appeal Deposits: The gazetted Act allegedly introduced a requirement for taxpayers to deposit 20% of the disputed tax amount as a condition for appealing decisions from the Tax Appeal Tribunal (TAT) to the High Court—a provision reportedly absent from the original bill.
• ​Expanded Enforcement Powers: New sections allegedly grant the tax authority the power to arrest individuals and sell seized assets without a court order.
• ​Removal of Oversight: Contentious reports suggest that provisions requiring the Nigeria Revenue Service (NRS) to report quarterly and annually to the National Assembly were deleted, effectively weakening legislative oversight.
• ​Removal of VAT from Federal Administration: Critics observed that petroleum income tax and Value Added Tax (VAT) were removed from the list of taxes under federal administration in the gazetted version, contradicting the harmonized text passed by parliament.

​Why the ECOWAS Court?

​By taking the matter to the ECOWAS Court, NEFGAD is seeking a declaration that these "doctored" laws violate the African Charter on Human and Peoples' Rights and various ECOWAS protocols. The plaintiffs argue that enforcing laws that did not follow the proper constitutional path of "Passage + Assent" is an affront to the separation of powers and a breach of the right to fair hearing and property.

​The organization is asking the court to:

• ​Annul the gazetted Acts entirely or strike down the "fraudulent" provisions.
• ​Order the publication of the Certified True Copies (CTCs) of the original laws as passed by the legislature.
• ​Compel the government to refund any taxes or penalties collected under the disputed sections.

​The Federal Government’s Stand: "A Structural Reset"

​Despite the outcry, President Bola Ahmed Tinubu and the Federal Government have maintained that the reforms are necessary for a "structural reset" of the economy. Presidential spokespersons have characterized the allegations as "clerical errors" or "unintended alterations" that do not warrant halting the entire reform process. They argue that absolute trust is built over time and that the administration remains committed to a tax system that supports prosperity.

​However, international consultancy firms like KPMG have flagged "errors, inconsistencies, and lacunae" in over 31 sections of the new laws, urging an immediate legislative review to avoid economic chaos and a dip in investor confidence.

​Impact on Businesses and Investor Confidence

​For the Nigerian business community, this legal battle creates a period of intense fiscal uncertainty. Companies are currently facing a dilemma: comply with the gazetted laws and risk paying unauthorized taxes, or challenge them and face the newly expanded enforcement powers of the tax authorities.

​Legal experts warn that if the ECOWAS Court rules against the Nigerian government, it could lead to a massive wave of litigation and refund claims, potentially destabilizing the national budget for 2026. Moreover, the perception of "unstable" laws is a major red flag for foreign direct investment (FDI), as businesses prioritize legal certainty above all else.