Mr. Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, was recently reported to have stated that “pay for runs” will be taxed from 2026.
The comment has since generated intense public debate — not necessarily from disagreement, but largely from a lack of understanding of how the tax system actually works.
So, can the law really tax “runs money” or sex work or other ‘immoral and illegal’ income?
Let’s look beyond the emotions and examine the mechanics of tax law.
The Legal Framework: Income Has No Morality
Under Section 3(1) of the Personal Income Tax Act (PITA), section 4 (5) of the Nigeria Tax Act, 2025 which becomes operational in 2026 uses the term ‘any other income, profit or gain…’
The wording is deliberate — the law does not concern itself with morality or legality, but with the fact of earning income.
Globally, the principle is settled: illegality does not exempt income from taxation. Hence, in theory, money received for “runs” sex work or any other immoral or illegal activities constitutes taxable income. Indeed, the amount standing to your credit in a bank account does not necessarily indicate the source, legitimate or illegimate.
The Grey Zone
This is where morality and legality collide. Sex work or lets call it its original name, prostitution, remains criminalised in most Nigerian states. In States where it is not expressly criminalised, soliciting and other situations around it are. Yet, from a fiscal perspective, the moment money is exchanged as consideration for a service — whether moral or not — it is income within the meaning of the tax law.
However, it may be argued that money generated from ‘runs’ are gifts. While one will be unable to discuss the mechanins of taxation of gifts here, this argument may not change the fact that any income is taxable. Although there is no expression provision on taxation of gifts in this sense under the law, cash gifts, particularly those done through bank transfer will be subject to tax.
So, while “runs” and other immporal and illegal income have always be taxable in theory, it remains unenforceable in practice — because you cannot openly assess what the law criminalises.
How the 2026 Reform Could Capture Such Income
Nigeria’s tax reform aims to bring Nigeria’s vast informal economy — which accounts for over 50% of GDP — into the tax net. This includes income sources outside formal employment: digital work, entertainment, freelancing, and even morally grey activities.
The reform’s strategy relies on:
- Digital tax identification and simplified filing systems,
- Presumptive tax regimes for informal earners,
- Data integration between BVN, NIN, and financial institutions, and
- Voluntary disclosure programs for undeclared income.
Through these tools, the system will no longer depend on what people confess to earning, but on their financial footprints — spending patterns, online transactions, and unexplained bank inflows.
Thus, tax authorities can capture the income trail, without endorsing the underlying conduct.
Taxation Does Not Legalise the Source
It is important to stress that collecting tax on income does not legalise its source.
Taxation is about fiscal accountability, not moral approval.
For instance, a tax authority may assess income earned from an activity even if that activity violates another law. This does not mean the government recognises or condones it — only that income is income under the law.
The Broader Reflection
Tax law measures earnings, not virtue. Moral judgment belongs to society and religion; taxation belongs to governance and fiscal responsibility.
If Nigeria truly intends to widen its tax base in 2026, it must accept this pragmatic truth — that the law can tax income without endorsing its source.
Final Thought
The debate around taxing “runs money” is less about sex or morality and more about how we understand the neutrality of law.
The state’s interest is in revenue, not righteousness. And perhaps that is why tax remains the most honest law of all — it does not discriminate between saints and sinners, only those who earn and those who don’t. if you look at it, even though who supposedly earns legitimately from businesses may have cheated. You cannot allow an excuse that money is tainted with immorality and therefore should be excused from tax.
The moral of this is regardless how you earn money, from 2026, you will need guidance on navigating the tax system.
