Political Panorama Issue No 29
In December 2025, the Federal Inland Revenue Service (FIRS) signed a Memorandum of Understanding with France’s tax authority, the Direction Générale des Finances Publiques (DGFiP), to collaborate on digitalising Nigeria’s tax administration. The agreement arrived just weeks before the formal transition of FIRS into the Nigeria Revenue Service (NRS) on January 1, 2026, under the recently enacted Tax Reform Act.
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| Federal Inland Revenue Service, Dr Zach Adedeji and French Ambassador to Nigeria, Marc Fonbanstier during the signing ceremony: Credit FIRS |
Political
Panorama interrogates the MoU across legal, institutional, technological,
fiscal, geopolitical, and democratic dimensions, offering a full-spectrum
analysis of the implications for Nigeria.
Legal
and Institutional Stakes: Between Reform and Dependency
Digital
tax modernisation is essential for broadening the tax base, reducing leakages,
and aligning Nigeria with global best practices. Collaboration with a
sophisticated tax authority like France’s DGFiP offers clear benefits in terms
of technical expertise, administrative standardisation, and exposure to
advanced compliance systems.
Yet
the legal terrain is fraught with risks. When foreign administrative templates
are imported wholesale into domestic governance structures, there is a danger
of de facto rule-making by external
actors. If software, procedures, or compliance frameworks designed for
France are embedded into Nigerian systems without full legislative oversight,
Nigeria could inadvertently surrender control over key policy levers.
Moreover,
the speed of technological reform can outpace Nigerian statutory frameworks.
Where digital tools create new enforcement powers or new categories of taxpayer
data, the absence of explicit legal safeguards threatens citizens’ rights and
creates governance grey zones. In short, modernisation must occur within Nigerian law and not around it.
Data
Governance and the Protection of Nigerians
The
shift towards digital tax administration requires extensive collection,
processing, and storage of personal and financial data. This makes data governance the single most critical
sovereignty issue in the MoU.
The
following unanswered questions loom large:
1.
Will Nigerian taxpayer data be
transferred to or processed in France?
2.
What controls govern access to, use
of, and storage of such data?
3.
Do Nigerians retain full rights
under the Nigeria Data Protection Act?
4.
Are there safeguards against
surveillance, profiling, or political misuse?
Without
explicit, published data-protection clauses, the risk of data colonialism emerges where a
foreign state gains privileged access to granular financial information of
Nigerian individuals and corporations. Function creep is a further danger. Data
collected for tax purposes may be repurposed for law enforcement, immigration,
or political control if guardrails are absent.
Algorithmic
opacity compounds these risks. If automated tax risk-scoring determines audits
or sanctions without clear explanations and appeal mechanisms, taxpayer rights
become vulnerable. The protection of Nigerians demands transparent disclosure
of the data architecture underlying the partnership.
Technological
Architecture, Cybersecurity, and Vendor Dependence
Beyond
laws and data, the technical systems themselves shape sovereignty. Foreign-built
software, foreign-hosted cloud systems, or foreign-controlled analytics platforms
can create long-term dependency.
Vendor lock-in is one of the most under-discussed threats. Once a system
becomes the backbone of national tax administration, the foreign provider
wields structural leverage. Cybersecurity risks multiply when systems are
interconnected or outsourced. A breach in any part of the chain exposes
Nigerians to identity theft, financial fraud, and blackmail.
To avoid these risks, Nigeria must
insist on:
1.
local hosting of core databases
2.
source-code escrow
3.
open standards and interoperability
4.
independent cybersecurity audits
5.
transparent procurement processes
The architecture of a digital tax
system is a matter of national security, not mere technical convenience.
Fiscal
and Economic Implications: Gains and Growing Pains
Nigeria
has one of the lowest tax-to-GDP ratios in Africa. Digitalisation, if done
correctly, can significantly increase non-oil revenues without raising
statutory rates.
The
potential benefits include:
1.
improved enforcement of cross-border
digital transactions
2.
reduced profit shifting by
multinational corporations
3.
more accurate VAT collection on
digital services
4.
broader tax net inclusion
But
without careful design, digital tax reform can unintentionally increase compliance burdens on small
businesses, gig workers, and informal sector actors, the very groups
already grappling with inflation and economic instability. Automated
enforcement systems may disproportionately target low-income taxpayers who lack
digital literacy or access to professional tax advice. True fiscal reform must
strike a balance between revenue generation and social fairness.
Cross-border
Enforcement and Extraterritoriality
Cross-border
information exchange is crucial for combating tax evasion, but it also creates
sovereignty trade-offs.
If
the MoU allows France broad access to Nigerian data or facilitates enforcement
actions originating in France, Nigeria must ensure:
1.
strict reciprocity
2.
judicial oversight
3.
clear legal limits on data use
4.
transparent reporting of foreign
access requests
The
risk involves asymmetric cooperation where Nigeria contributes more than it
receives, or where foreign authorities gain influence over domestic fiscal
decisions. Sovereignty in tax matters is not merely symbolic, but it is about
protecting Nigerian citizens and businesses from undue foreign intrusion.
Transparency,
Accountability, and Democratic Oversight
The
biggest red flag thus far is opacity.
Neither the MoU nor its technical annexes have been published. Nigerians do not
know the details of the systems being imported, the data being shared, or the
oversight structures being created.
In
a democracy, secrecy around a major transformation of the fiscal state is
unacceptable. Taxation is the most potent instrument of state power. Any reform
that increases state visibility into citizens’ financial lives must be subject
to robust debate, legislative scrutiny, and public transparency.
Nigeria
must avoid the drift toward a technocratic
fiscal regime where foreign-designed systems circumvent local democratic
institutions.
Capacity
Building and Institutional Ownership
At
its best, the MoU could build strong Nigerian institutions capable of
independently managing advanced digital tax systems. But capacity-building must
be genuine, measurable, and tied to clear outcomes.
If
training is shallow, technical assistance is externalised, or expatriate
experts occupy pivotal roles, Nigeria risks creating a façade of reform while
remaining structurally dependent on foreign expertise.
Institutional
autonomy is not measured by software installation. It is measured by ownership.
Geopolitics
and the Strategic Positioning of Nigeria
France’s
global tax diplomacy is strategic. By building deep administrative ties with
developing economies, France strengthens its influence within the international
tax order, especially the post-BEPS environment where OECD standards shape
global norms.
Nigeria
must engage strategically, avoiding a partnership that limits future
flexibility or binds the country too tightly to a single geopolitical partner.
Digital
tax systems are increasingly instruments of global influence. Nigeria must
approach such partnerships with both open arms and open eyes.
Conclusion: Modernisation with Caution
The
FIRS–DGFiP MoU has immense potential. Nigeria desperately needs a modern,
transparent, digital tax system. Cooperation with experienced partners can
accelerate progress and enhance fiscal resilience.
But
reform without safeguards becomes vulnerability.
And
digitalisation without transparency becomes overreach.
Nigeria
must pursue digital tax reform as a sovereign
nation, not a passive recipient of foreign templates. The government
should immediately:
1.
publish the MoU and all
data-protection assessments
2.
establish parliamentary oversight
committees
3.
mandate data localisation and
algorithmic transparency
4.
strengthen citizen appeal rights
5.
ensure local capacity replaces
foreign dependency
The
success of this partnership will depend not on the technology imported but on
the sovereignty preserved, the rights protected, and the institutional capacity built.
Nigeria
must modernise but never at the expense of the Nigerian people.
………………..STOP PRESS……………..
“You Cannot Tax
Hunger”: Opposition Slams Tinubu’s
New Tax Law, Demands Immediate Suspension
The National Opposition
Movement (NOM), at a recent press conference in Abuja, condemned President Bola
Tituba’s proposed tax law, describing it as not a reform but a “direct assault
on the livelihood of ordinary Nigerians.” The group argued that Nigeria is
already facing severe insecurity, poverty, unemployment, and a declining
quality of life, and that introducing a punitive tax regime amid subsidy
removal, inflation, and the naira's collapse would further impoverish citizens
and small businesses.
NOM criticized provisions
that require all adults, including the unemployed, to file tax returns, warning
that weak institutions, poor internet access, and widespread joblessness would
turn the policy into an exploitative enforcement racket. The group accused the
administration of prioritizing oligarchic interests over citizens’ welfare,
lacking transparency and accountability, and presiding over state capture and
grand corruption, including opaque tax-related agreements with foreign
entities.
Aligning with organized
labor (NLC and TUC) and opposition voices, NOM called for the immediate
suspension of the tax plan, nationwide consultations, social protection
guarantees, and a shift toward taxing luxury, excess profits, monopolies, and
corruption rather than poverty. The movement warned that forcing the tax
through without consultation would deepen social and economic crises, stressing
that Nigeria’s problem is not low taxation but waste, mismanagement, and policy
arrogance.
A
Message of Appreciation from Political Panorama
As the year draws to a
close, the entire Political Panorama team extends our heartfelt appreciation to
our numerous readers for your unwavering support, thoughtful direct messages,
words of encouragement, and constructive comments throughout the year. Your
engagement inspires our work and strengthens our commitment to informed,
courageous, and people-centered commentary.
We thank you for walking
this journey with us and for being an active part of the Political Panorama
community.
As we go into our
Christmas break, we wish you and your loved ones a Merry Christmas and a
peaceful, joyful celebration. We also wish you a prosperous, healthy, and
fulfilling New Year.
Political Panorama will
resume publication on January 15th, 2026.
Thank you for your
continued trust and support.
Warm regards,
Political Panorama with
Ola Olateju
Until January 15th, this is Political Panorama with Ola Olateju watching the horizon,
one controversy at a time
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