I started watching The Source of the River last month, seeking an evening of entertainment but finding an unexpected masterclass in human behavior, economics, and governance. The 2025 drama follows a global investigation into tax evasion, tracing money from luxury boardrooms to shadowy shell companies. What struck me was not just the suspense but the metaphor: money, like water, has a source, a flow, and a destination. One may divert it for a while, but eventually, it finds its natural course – often revealing integrity or its absence.
At several policy forums where I have spoken about Nigeria’s new tax laws, one question persists: will compliance improve when the new framework takes effect in January 2026? It is both a practical and moral question. In Nigeria, compliance has long been a negotiation – between law, culture, and convenience. Yet, as The Source of the River reminds us, the current will always find its way back to truth.
The New Architecture of Accountability
The Nigerian Taxation Act (NTA) 2025 and the Nigerian Tax Administration Act (NTAA) 2025 represent a decisive shift in Nigeria’s fiscal landscape. Coming into force in January 2026, these laws aim to strengthen administration, harmonize compliance, and modernize the tax net. Importantly, they redefine the fiscal boundaries of charities, not-for-profits, and faith-based organizations engaged in commercial ventures.
For decades, these entities have operated within a moral but opaque zone. Many have contributed immensely to education, health care, and welfare, yet some of their ventures compete commercially in the open market while enjoying full tax exemption. The new Acts are not punitive; they merely draw a clear line between sacred service and secular enterprise. Worship remains exempt, but profit-making no longer hides behind the pulpit or the mosque dome.
This principle is rooted in fairness. When a church-owned university charges full tuition or a mosque-affiliated hospital runs a fee-paying clinic, the income ceases to be charitable. It is, in essence, commercial – and therefore taxable.
Faith, Wealth, and the Moral Ledger
Religious giving predates modern taxation. Islam’s Zakat and Sadaqat, and Christianity’s tithe and offering, are ancient instruments of social equity. They ensured redistribution and community welfare long before revenue services existed. Yet history shows that when spiritual institutions accumulate unchecked wealth, their moral clarity dims.
In medieval Europe, the Church owned vast estates but paid little toward civic upkeep, prompting public resentment and, eventually, the Reformation. In the Ottoman Empire, charitable waqf foundations – initially vehicles of public good – became hereditary monopolies until law reined them in. The pattern is consistent: when faith institutions grow powerful without fiscal oversight, the boundary between ministry and monopoly blurs.
Nigeria faces a similar moment. Faith-based organizations today command extensive assets and influence. Their social contributions are immense, yet the absence of uniform fiscal transparency has created both admiration and suspicion. The NTA 2025 seeks to address this imbalance not by taxing piety, but by ensuring that charity retains its essence, while enterprise bears its responsibility.
Compliance as a Covenant of Integrity
In Nigeria, taxation evokes mixed emotions. Many see it as a state extraction unaccompanied by visible benefit. By contrast, religious giving is perceived as spiritually rewarding and socially useful. It is why congregants give freely to churches and mosques but reluctantly to the government.
Yet both systems rest on the same ethical foundation – shared responsibility. Scripture recognizes the state’s right to revenue. Jesus’ admonition to “render unto Caesar what is Caesar’s” affirmed that civic obligation and spiritual faith can coexist. The Prophet Muhammad institutionalized Zakat as a duty that sustains community and purifies wealth. Both traditions teach that integrity in financial stewardship is part of righteousness.
The NTAA 2025 invites not-for-profit entities to embrace this same ethos. Compliance is not a burden; it is the testimony of integrity before both God and government. A faith-based organization that pays its lawful taxes on commercial income strengthens – not diminishes – its moral witness.
Lessons from History and Neighbours
Every society that has matured economically has faced the question of how to tax religious or charitable institutions without undermining faith. England’s Magna Carta of 1215, while curbing royal excess, also established that church estates engaged in trade must contribute to public revenue. The United States’ 1954 Internal Revenue Code enshrined church exemptions but subjected unrelated business income to taxation.
In Africa, Ghana’s 2016 tax reforms brought religious universities and hospitals into partial taxation, balancing charity with equity. Kenya’s 2018 Charities Act required all faith-based entities to submit annual audited accounts – a measure that enhanced public confidence. Nigeria’s 2025 reforms follow this global logic: exempt the spiritual, tax the commercial, and demand transparency in between.
Far from diminishing religion, such reforms protect it. When faith institutions comply willingly, they demonstrate that spirituality and civic order can reinforce each other.
Challenges and Pathways
The main obstacles to compliance in Nigeria are not defiance but disorganization. Many not-for-profits lack adequate record-keeping systems. Donations and trading income are often mingled. Some leaders remain unaware of reporting standards. The NTA and NTAA address these gaps by setting clear definitions and timelines.
Faith-based organizations should respond proactively – by strengthening internal governance, employing professional accountants, and establishing audit committees. Proper documentation not only ensures compliance but safeguards credibility. It also enhances access to funding and partnerships, as global donors increasingly prioritize transparency.
For the government, enforcement must be fair and professional. Tax officers must differentiate between genuine charity and disguised commerce. Arbitrary enforcement risks eroding trust. Most importantly, the state must justify taxation through visible public service. A taxpayer who sees value in government spending becomes a compliant citizen.
Toward a Culture of Transparent Faith
Faith institutions occupy a central place in Nigeria’s moral and social landscape. They educate, heal, and inspire millions. Now, they are called to also model fiscal responsibility. Compliance should be embraced not as submission to the state but as service to society. When churches and mosques file returns accurately and pay taxes on business ventures, they set a national example – that accountability is an article of faith.
Transparency strengthens moral authority. A faith organization that practices financial openness cannot easily be accused of hypocrisy. It teaches that righteousness includes responsibility, and that holiness without honesty is incomplete. The new tax laws, properly understood, are not an attack on faith but an appeal to conscience.
The River Finds Its Source
In the final scene of The Source of the River, the once-defiant tycoon walks into the tax office, pays what he owes, and tells the investigator, “It feels lighter.” The response is profound: “That’s the weight of honesty leaving your wallet.”
Nigeria stands at that same moral crossroad. The NTA 2025 and NTAA 2025 are not instruments of punishment but frameworks of renewal. They summon every actor – state, corporation, and faith institution – to account for what has been entrusted to them.
If our mosques, churches, and charities lead this transformation, they will reaffirm their relevance in a society yearning for integrity. For in the end, both faith and governance are bound by the same principle: stewardship. And like every river, accountability must always find its source.
