Towards Fairer Taxation: Reducing the Informal Sector Tax Burden in Federal Capital Territory(FCT). The quest for a fair, inclusive, and progressive tax system in Nigeria took a bold step forward with the recent on-boarding of the Tax Justice and Governance Platform (TJ&GP) in the Federal Capital Territory (FCT). Spearheaded by a coalition of civil society organizations, including CISLAC, ActionAid Nigeria, Christian Aid, Oxfam, IBP, CDD, and the Nigeria Labour Congress (NLC), the platform aims to advance a just tax system that supports social equity, fiscal transparency, and inclusive governance. This initiative comes at a crucial time when Nigeria’s informal sector, which contributes up to 70% of national revenue and accounts for over 60% of the labour force, continues to bear a disproportionate share of the tax burden, often without commensurate public service benefits. Understanding the Informal Sector Tax Paradox In Nigeria’s tax landscape, the informal sector represents a paradox: it is both heavily taxed and under-represented. Small and micro businesses – many operating on survival-level incomes – face multiple and fragmented levies imposed by both state and non-state actors, often without legal backing or accountability. This fragmented tax regime has led to a proliferation of: Unregulated tax collectors Documented and undocumented levies Double taxation and harassment of vulnerable business owners Lack of clarity and transparency in tax policy application According to Chinedu Bassey, a representative of the Platform, there is no clear framework for the taxation of the informal sector. This regulatory ambiguity has created an environment where: Some large businesses exploit the informal economy to evade taxes The poorest bear the brunt of uncoordinated and regressive tax practices Gender inequities in tax collection and administration persist The Role of the Tax Justice and Governance Platform (TJ&GP) The TJ&GP seeks to reverse this trend through advocacy, research, policy engagement, and public sensitization. As explained by Chika Oko, Senior Programme Officer at the International Budget Partnership, the platform promotes the principles of: Tax transparency Tax equity Tax accountability The group’s central goal is to foster “tax for development”, where revenue generation is directly linked to visible public goods and services, particularly for the poor and underserved. According to Oko, “Tax remains the most sustainable means of funding development,” and a fair system must ensure that low-income earners are not unduly overburdened. In addition, TJ&GP advocates for the inclusion of civil society in tax reform discussions, citing the importance of collaborative policy design, shared data systems, and citizen engagement in tax governance. Key Advocacy Focus Areas TJ&GP is particularly concerned with the following systemic issues: Illicit financial flows and revenue leakages Unjust tax expenditures and waivers Inconsistent and unreliable tax data Use of unauthorized or informal tax agents Digital taxation and its inequitable application Multinational tax avoidance and base erosion Gender biases in tax policy design and enforcement In her remarks, Oko stressed the importance of strategic exemption mechanisms to protect extremely low-income earners. “Fair share,” she noted, may mean zero tax for some micro-enterprises, emphasizing that progressive taxation must consider ability to pay, not merely presence in the market. Policy Recommendations and the Way Forward In order to achieve tax justice and improved informal sector inclusion, the following recommendations are critical: 1. Develop a Unified Informal Sector Tax Framework The Federal Capital Territory Administration (FCTA) and the FCT Internal Revenue Service (FCT-IRS) should harmonize levies imposed on informal businesses, backed by a clear legal and administrative framework that defines obligations and exemptions. 2. Exempt Vulnerable Groups There must be a categorical exemption for low-income earners, such as petty traders, artisans, and those below the minimum income threshold. This will uphold Nigeria’s commitment to progressive taxation and reduce extreme poverty. 3. Address Tax Leakages from High Net-Worth Individuals and Multinationals Strengthen the capacity of tax authorities to audit and monitor complex transactions, especially transfer pricing abuses, underreporting, and offshoring used by large entities to evade taxes. 4. Use Technology to Capture and Formalize Informal Businesses Deploy digital enumeration systems, taxpayer ID issuance, and simplified platforms for micro-tax compliance. These tools must be low-cost, mobile-friendly, and supported by civic education campaigns. 5. Promote “Tax for Service” Accountability Revenue from informal sector taxation should be visibly linked to service delivery – roads, water supply, markets, waste management, etc. This will rebuild public trust and encourage voluntary compliance. 6. Institutionalize Stakeholder Dialogue Platforms Establish continuous engagement mechanisms between tax authorities, civil society, and informal sector representatives to ensure participatory governance and grievance redress. 7. Integrate Gender Equity in Tax Policy Recognize the disproportionate burden on women in the informal sector and adjust policy accordingly. Tax laws should account for unpaid care work, financial inclusion gaps, and access to credit. Conclusion The launch of the Tax Justice and Governance Platform in the FCT marks a significant milestone in Nigeria’s journey toward a just, equitable, and development-focused tax regime. As the government continues to advance tax reforms and digitization efforts, it must ensure that no group is left behind, particularly the informal sector which forms the backbone of the economy. Tax justice is not merely about who pays and how much – it’s about fairness, representation, and visible development outcomes. With sustained advocacy, policy collaboration, and accountability mechanisms, Nigeria can build a tax system that truly works for the many, not just the few. Olatunji Abdulrazaq CNA, ACTI, ACIArb(UK) Founder/CEO, Taxmobile.Online