The Federal Government on tuesday has officially stopped the collection of taxes in cash and banned the use of roadblocks for revenue enforcement nationwide, as part of new measures to implement Nigeria’s updated tax reforms.
The announcement was made in Abuja during the signing of the Presumptive Tax Regulations and Implementation Guidelines at the Federal Ministry of Finance. The Executive Secretary of the Joint Revenue Board,Mr Olusegun Adesokan, explained that the move is aimed at eliminating unregulated and forceful tax practices, especially at state and local levels.
According to him, “All cash-based tax collections by revenue authorities are now prohibited. Setting up roadblocks for tax enforcement is also no longer allowed.”
He said the new regulations are designed to promote fairness, accountability and structure within Nigeria’s tax administration, particularly among traders and operators in the informal sector.
Describing the reform direction of the government, Adesokan stated, “This is part of the broader commitment to focus taxation on prosperity rather than placing pressure on the poor.”
Under the new presumptive tax framework, nano and small businesses with annual turnover of N12 million and below will not pay tax.
“Our nano and small businesses earning N12 million or less annually are exempt from this tax system,” he clarified.
For other informal businesses that fall outside that category, a flat one per cent tax on turnover will apply.
“It establishes a one per cent turnover tax for other informal sector operators,” he added, noting that the system encourages the use of digital and technology-driven payment platforms.
Adesokan further explained that the guidelines create a unified structure for states to tax commercial activities while bringing operators into a formal system through a Tax Identification platform.
“These regulations now provide the official structure for taxation within the commerce sector,” he said, adding that cooperation among states reflects a more coordinated national tax strategy.
Also speaking at the event, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the signing signals the movement from legislative approval to full implementation of the tax reforms introduced in 2025 and early 2026.
“With these regulations now signed, we are moving from policy framework to practical implementation of the tax reforms,” Edun stated.
He described the framework as simple and transparent, stressing that it is built on “openness, fairness, clarity, equity and inclusive economic participation for Nigerians.”
“Our goal is to ensure uniformity, eliminate arbitrary tax assessments and protect small businesses while supporting economic growth,” he added.
The minister emphasized that the objective is not to increase tax rates but to widen the tax net in an organized way.
“We are focused on expanding the tax base — not increasing taxes — so that everyone contributes fairly to national development,” he said.
Edun noted that the reforms were developed alongside the Joint Revenue Board to ensure better coordination across federal, state and local governments.
“Our responsibility is to make sure tax administration works together at all levels, rather than operating in isolation, and delivers real impact for Nigerians,” he explained.
Linking the reforms to broader economic goals, he revealed that the economy recorded over four per cent growth in the final quarter of 2025, with a target to push growth toward seven per cent in the short term as part of the long-term ambition of building a $1 trillion economy by 2030.
He assured stakeholders that implementation would be closely supervised to ensure fairness, revealing that an ombudsman system has been introduced.
“The implementation process will be carefully monitored, and an ombudsman has been put in place to ensure fairness in applying the tax laws,” he said.
Chairman of the National Tax Policy Implementation Committee, Joseph Tegbe, described the signing as a turning point from policy formulation to real execution.
“With the signing of these presumptive tax guidelines, we have shifted from written provisions to real-world application,” he stated.
He maintained that the reforms are aimed at correcting inefficiencies rather than placing new burdens on citizens.
“This is not about adding new pressure but about fixing fragmentation in the system and replacing arbitrariness with transparency,” he said.
Tegbe observed that although over 80 per cent of Nigeria’s workforce operates in the informal sector, their contribution to structured public revenue has remained limited due to systemic gaps.
“The informal sector accounts for more than 80 per cent of our workforce, yet its structured revenue contribution has been low — not because operators refuse to pay, but because the system has been too complex or disconnected from their realities,” he explained.
He added that long-term development depends on sustainable revenue generation and pledged disciplined implementation of the framework.
“With today’s signing, we are moving decisively from intention to full execution,” Tegbe concluded.
President Bola Tinubu had earlier signed four major tax reform bills into law in June 2025, including the Nigeria Tax Act and related legislation aimed at modernising the country’s tax structure.
