The Relationship Between Tax Payments and Government Accountability: A Historical Perspective.

Introduction
Taxation is not merely a fiscal instrument for revenue collection; it is a foundational pillar of the social contract between citizens and the state. Historically, the act of paying taxes has been tightly linked to demands for transparency, responsiveness, and accountability. As Nigeria prepares to implement the 2025 Tax Act, this linkage will be critical: a successful transition to a tax-based democracy requires that taxpayers feel their contributions are fairly levied and judiciously applied.

Global Perspective
Empirical and theoretical literature demonstrates that taxation can strengthen governance. Studies and reviews (e.g., Martin, 2013; World Bank, 2004) show that broad-based tax systems increase citizen engagement and generate pressures for oversight, improved public services, and institutional responsiveness. When citizens perceive that taxation yields visible and equitable public benefits, tax morale rises and the legitimacy of public institutions is reinforced.

African Perspective
Across sub-Saharan Africa, the relationship between tax policy and state accountability is especially pronounced. Research by Fjeldstad and Moore (2008) and Rakner and Gloppen (2003) highlights how efforts to broaden the tax base and improve revenue administration can help build trust between citizens and governments. Transparent revenue collection and credible public expenditure management create incentives for citizens to demand better governance and reduce tolerance for rent-seeking behaviour.

Nigerian Perspective
Nigeria’s historical reliance on oil rents has weakened the fiscal bond between taxpayers and the state. Many analysts argue that when governments derive the lion’s share of revenue from natural resources rather than from citizens’ taxes, the feedback loop that disciplines public officials is attenuated. Public commentators — including well-known economists and analysts — contend that a shift toward a tax-based democracy is essential to restore fiscal responsibility and civic accountability. The 2025 Tax Act therefore presents a unique opportunity: as more Nigerians become direct contributors to national revenues, they will also acquire greater moral authority to demand transparency, prudent spending, and policy consistency.

Cultural and Behavioral Dimensions
Unfavourable tax cultures are often rooted in perceptions of corruption and repeated breaches of public trust. Classic work on tax behaviour (Roth, Scholz & Dryden‑Witte, 1989) emphasizes that cultural frames shape how individuals interpret taxation and compliance. Taxpayer attitudes reflect judgments about fairness, equity, and institutional legitimacy; as Bobek (1997) observes, perceptions of benefit and procedural justice strongly influence compliance decisions. Rebuilding tax morale therefore requires more than enforcement—it requires demonstrable improvements in fairness and accountability.

Citizen Mobilization and Demand for Accountability
Evidence from across the continent shows that taxpayers increasingly mobilize around demands for transparency. Protests and civic campaigns in Nigerian cities and elsewhere reflect impatience with opaque budgeting, irregular service delivery, and perceived mismanagement. These movements underscore a simple truth: when citizens pay, they expect a say and visible returns on their contributions.

Policy Implications and Recommendations
To translate the 2025 Tax Act into stronger accountability, policymakers should prioritize:
- Transparent revenue reporting and participatory budgeting to connect taxes paid with public outcomes.

• Clear, consistent tax rules and predictable repatriation and compliance processes.
• Robust public expenditure tracking and independent audits to reduce opportunities for leakage.
• Strengthened anti‑corruption institutions and visible enforcement that target high‑level malfeasance.
• Civic education campaigns that explain the link between tax payments and public goods, cultivating informed tax morale.

Conclusion
The historical relationship between taxation and government accountability is durable and consequential. Nigeria’s move toward broader tax mobilization under the 2025 Tax Act can catalyse a deeper social contract—if, and only if, the state demonstrates credible stewardship of public resources. Restoring trust will demand transparency, institutional reform, and sustained political will. When those conditions are met, taxation becomes not only a source of revenue but a powerful engine for accountable governance.

Selected references

• Bobek, D. D. (1997). How do individuals judge fairness and what effect does it have on their behaviour?
• Fjeldstad, O.-H., & Moore, M. (2008). Revenue authorities and governance in sub-Saharan Africa.
• Martin, L. (2013). Taxation and government accountability.
• Rakner, L., & Gloppen, S. (2003). Taxation, representation, and accountability in sub-Saharan Africa.
• World Bank. (2004). World Development Report: Making Services Work for Poor People.

For further briefing or a policy note tailored to Nigerian stakeholders, the Alliance for Economic Research and Ethics LTDGTE stands ready to assist.