In recent years, Nigeria has witnessed the troubling rise of non-state actors involved in tax collection across various sectors of the economy. From transport unions and market associations to local vigilante groups and, in some cases, outright criminal organisations, these entities have increasingly taken on the role of revenue collectors, often outside the bounds of law and without accountability. This dangerous trend not only undermines legitimate governance structures but also fuels corruption, weakens investor confidence, and imposes an unnecessary burden on already struggling Nigerians.
Across markets and motor parks, traders and transporters are routinely forced to pay levies, fees, and so-called “dues” to non-state entities claiming authority from local councils or traditional institutions. These collections are rarely receipted, never audited, and often enforced through intimidation or violence. In many cases, the proceeds never reach the coffers of local or state governments but instead line the pockets of powerful individuals or interest groups.
The implications are far-reaching. First, the proliferation of unauthorised tax collectors erodes the rule of law. When people begin to see revenue collection as a racket rather than a civic responsibility, public trust in the state collapses. Taxation ceases to be a tool for development and becomes a mechanism of extortion. This undermines legitimate tax systems, weakens the fiscal base of governments, and hampers the delivery of critical public services.
Second, the activities of non-state collectors discourage entrepreneurship and deepen poverty. Small business owners, especially in informal markets, face multiple layers of illegal levies that cut into their margins and make it difficult to scale. Transporters are forced to pay at every checkpoint and bus stop, raising the cost of goods and services across the country. These artificial costs contribute to inflation and diminish the competitiveness of local industries.
Third, allowing non-state actors to collect taxes fosters insecurity. In some parts of Nigeria, armed groups have established parallel revenue systems, collecting taxes from farmers, traders, and transporters under threat of violence. Where the state abdicates its responsibility to enforce tax laws and protect citizens, warlords and criminal syndicates fill the vacuum. This has been particularly evident in parts of the North-West and South-East, where bandits and separatist groups respectively have imposed levies on communities. Such developments are not only unconstitutional; they are a threat to Nigeria’s sovereignty.
Even within more structured associations like motor park unions, the blending of political influence, coercion, and revenue collection has created a potent source of abuse. Union leaders with ties to political elites often act with impunity, using their positions to generate personal wealth at the expense of the masses. In cities like Lagos, complaints about multiple, arbitrary levies imposed on transport workers are routine, yet authorities rarely act decisively to curb the trend.
This situation cannot be allowed to persist. If Nigeria is to build a sustainable and inclusive economy, taxation must be legal, transparent, and equitable. The federal and state governments must urgently reform tax administration to eliminate leakages and informal systems. Local governments, often cited as the source of authorisation for non-state tax collectors, must be held to stricter oversight and accountability standards.
Furthermore, law enforcement agencies must clamp down on illegal tax collection operations, especially those tied to violence or criminality. Clear, accessible channels must be established for traders, transporters, and citizens to report abuse without fear of retaliation.
In the long term, Nigeria needs to digitise and centralise its tax collection processes, particularly at the local level. E-payment systems, simplified tax codes, and public education campaigns can improve compliance while reducing the influence of middlemen and illegal collectors.
As the country battles economic headwinds from inflation to unemployment, the last thing Nigerians need is to be squeezed by informal tax regimes that serve no developmental purpose. It is time for the government to reclaim its fiscal authority and dismantle the shadow economy of non-state tax collectors.
The power to tax is a power that should rest only with the state, and it must be exercised with transparency, fairness, and the consent of the governed.
