Nigeria’s federal government has outlawed the use of roadblocks to collect taxes and levies and banned all cash payments to tax authorities, replacing years of coercive and fragmented revenue enforcement with a new digital, turnover-based framework designed to bring millions of informal traders into the formal economy.
The Presumptive Tax Regulations and Guidelines were signed on Tuesday at the Ministry of Finance in Abuja, marking the transition from legislative approval to operational enforcement of tax reforms enacted in 2025 and early 2026. Olusegun Adesokan, Executive Secretary of the Joint Revenue Board (JRB), said the framework was designed to eliminate informal, coercive and fragmented tax practices, particularly at the subnational level.
Under the new rules, nano and small businesses with an annual turnover of N12 million and below are fully exempted from tax under the presumptive regime. Other informal businesses above that threshold will pay a flat rate of one percent on turnover, with liability assessed against simple indicators such as business category and turnover level rather than complex accounting records.
The Chairman of the National Tax Policy Implementation Committee, Joseph Tegbe, said the informal sector employs more than 80 percent of Nigeria’s workforce yet contributes little to structured public revenue, not from unwillingness, but because the previous compliance framework was too complex to navigate.
Finance Minister Wale Edun described the reform as a structural shift rather than a revenue grab. “Our fiscal strategy is anchored on expanding the tax base rather than increasing tax rates,” he said, adding that a broader tax base would give the government greater capacity to fund infrastructure, security and social investment.
Edun added that the regulations were developed in collaboration with the JRB to ensure alignment across federal, state and local governments, and that implementation would be closely monitored. An ombudsman mechanism has been introduced to protect taxpayers from arbitrary assessments and ensure consistent, rules-based enforcement nationwide.
Nigeria’s economy grew more than four percent in the final quarter of 2025, and the government is targeting seven percent growth in the near term, in line with President Bola Tinubu’s ambition of building a $1 trillion economy by 2030.
