No country can achieve equitable economic growth without an effective tax system that promotes fair wealth distribution. Nigeria faces persistent income inequality, and addressing it requires well-structured fiscal measures. This study investigated the effect of tax policies, specifically Value Added Tax (VAT) and Petroleum Profit Tax (PPT) on income inequality in Nigeria within the period 1999–2023. Using secondary time series data analyzed with the Ordinary Least Squares (OLS) regression technique, the findings reveal that both VAT and PPT have significant negative effect on the Gini coefficient, indicating that they helped reduce income inequality during the study period. Based on these results, the study recommends that VAT should be structured to exempt basic and essential goods so that the tax burden does not disproportionately fall on the poor. Additionally, Petroleum Profit Tax revenue should be efficiently utilized and invested in healthcare, social development, and other essential sectors to promote inclusive growth and equitable distribution of resources.