Rentier State Syndrome: Does Oil-rentierism Impede Taxation in Nigeria?

Rentier states typically depend on external funding from the extraction and sale of important natural resources under the total control of government, run by a ruling elite group. Amassed wealth is transferred to the populace in exchange for the society’s refrain from obtaining political power. A rentier state's primary responsibility is therefore ‘wealth distribution’ rather than ‘wealth creation’ from the populace through any kind of taxation. Based on the above narrative, the study aims to examine the rentier state syndrome in Nigeria and how it affects tax revenue, which is largely based on non-oil sector development. The study established that overreliance on oil rents over the years has adversely affected tax revenues, and consequently general government revenue in Nigeria. It also revealed that recent economic disruptions in the global oil market and oil sector mismanagement have affected the financial and economic benefits of oil in the country. The study identified policy measures such as economic diversification, tax-code reforms, improved tax transparency and systematic review of tax expenditure, to reposition the tax campaign and improve tax revenues in Nigeria.