When Non-state Actors Become Tax Collectors

The collection of taxes by non-state actors in Nigeria raises serious questions about governance, accountability, and the rule of law. Across various regions of the country, reports have emerged of informal groups, community leaders, and even criminal organis-ations imposing levies on businesses, individuals, and households. This phenomenon is symptomatic of deeper structural and institutional weaknesses, and it threatens to undermine Nigeria’s economic stability and social cohesion.
Taxation is a fundamental function of government, serving as a primary means of generating revenue for public goods and services. However, in many parts of Nigeria, particularly in rural areas and conflict-prone regions, the absence of effective state presence has created a vacuum that non-state actors have exploited. For instance, in some areas, traditional rulers or local vigilante groups impose levies under the guise of community development fees. In other instances, insurgent groups and armed militias levy taxes as part of their parallel governance structures.
One major concern is the lack of transparency and accountability in these tax collections. Unlike government-administered taxation, which is subject to legislative oversight and public scrutiny, levies imposed by non-state actors are often arbitrary and unregulated. This creates room for exploitation, with citizens paying multiple taxes without receiving any tangible benefits in return. Businesses, particularly small and medium enterprises, bear the brunt of these informal levies, which increase their operational costs and stifle growth.
The proliferation of non-state tax collectors also undermines the authority of the government. When citizens are forced to comply with the demands of informal tax collectors, it erodes trust in formal institutions and weakens the social contract between the state and its people. This phenomenon is particularly pronounced in regions where the government’s ability to enforce laws is already compromised, such as areas affected by insurgency or banditry.
Furthermore, the economic implications are profound. Non-state taxation diverts funds that could have been invested in productive activities or paid as formal taxes to the government. This, in turn, reduces the resources available for public services such as education, healthcare, and infrastructure. It also distorts the business environment, creating an uneven playing field where some operators are subject to multiple levies while others evade them entirely.
Addressing this issue requires a multifaceted approach. First, the government must strengthen its presence in areas where non-state actors have taken over tax collection functions. This includes deploying security forces to restore law and order, as well as investing in infrastructure and public services to build trust and legitimacy.
Second, there is a need for comprehensive tax reform that simplifies the tax system and makes it more inclusive. By broadening the tax base and ensuring that taxation is fair and equitable, the government can reduce the incentives for informal tax collection.
Third, public awareness campaigns are crucial to educating citizens about their tax rights and responsibilities. When people understand the importance of paying taxes to the government and the dangers of complying with informal levies, they are more likely to resist exploitation by non-state actors.
Finally, accountability mechanisms must be strengthened to ensure that government-collected taxes are used effectively and transparently. Citizens are more likely to comply with formal taxation when they see tangible benefits such as improved roads, schools, and healthcare facilities.
The rise of non-state tax collectors in Nigeria is a symptom of broader governance challenges that require urgent attention. By addressing the root causes of this phenomenon and restoring the primacy of formal institutions, Nigeria can create a more stable and equitable system of taxation that supports economic growth and social development.