The Federal Government has officially prohibited the collection of taxes in cash and banned the use of roadblocks for revenue enforcement across the country, marking a major operational shift in Nigeria’s tax administration.
The new regulations, which aim to implement the country’s recently enacted tax reform laws, were unveiled on Tuesday in Abuja by Mr Olusegun Adesokan, Executive Secretary of the Joint Revenue Board, during the signing of the Presumptive Tax Regulations and Guidelines on the Implementation of the Tax Laws at the Federal Ministry of Finance.
“It bans all forms of cash collection by tax authorities. It also bans the mounting of roadblocks for the collection of taxes,” Adesokan stated, explaining that the new framework is designed to end the informal, coercive, and fragmented tax practices that have long characterised revenue collection, particularly at the subnational level.
According to him, the regulations are intended to entrench transparency and equity in tax administration, especially within the commerce and informal sectors. He described the reforms as a demonstration of the government’s commitment to “taxing prosperity and not poverty.”
Relief for Small Businesses
In a move that will benefit millions of micro-enterprises, Adesokan announced that nano and small businesses with an annual turnover of N12 million and below would be completely exempted from tax under the new presumptive tax regime.
“Our nano and small businesses with an annual turnover of N12m and below are exempted from tax,” he confirmed.
For other categories of informal businesses, the framework introduces a one per cent tax rate on turnover, while strongly encouraging the adoption of technology-driven payment systems to replace cash transactions.
The guidelines also provide a uniform structure for subnational governments to tax the commerce sector and facilitate the integration of informal operators into the formal system through a Tax Identification platform. Adesokan noted that the alignment of states behind the framework signals a coordinated national approach to tax administration.
From Legislation to Implementation
Speaking at the ceremony, the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, described the signing as the critical transition from legislative approval to operational enforcement of the tax reforms enacted in 2025 and early 2026.
“With the signing of these regulations, we are transitioning from regulation to structured implementation of the tax reforms,” Edun said.
He characterized the regulations as a simple and transparent framework for applying presumptive tax, anchored on “transparency, fairness, clarity, indeed, equity, and economic inclusion for Nigerians.”
The minister emphasized that the reforms are not intended to increase the tax burden on citizens but to broaden the tax base in a structured and equitable manner.
“Our aim is to ensure consistency, prevent arbitrary assessments, and to protect small businesses while ensuring the continuous growth of the Nigerian economy,” he stated. “We’ll expand the tax base, not raising taxes, but expanding so that each bears his rightful contribution to the common cause.”
Edun disclosed that the regulations were developed in close collaboration with the Joint Revenue Board to ensure alignment across federal, state, and local governments, stressing that tax administrations must be coordinated rather than fragmented to deliver tangible results and impact to all Nigerians.
The minister linked the reforms to the government’s broader economic growth objectives, noting that while economic expansion exceeded four per cent in the last quarter of 2025, further acceleration is required. He set ambitious targets, stating the government is working “to try to get to seven per cent GDP growth on our way to Mr President’s clear-stated targetโฆ by 2030, the $1tn economy.”
To safeguard fairness during implementation, Edun assured stakeholders that a monitoring mechanism, including an ombudsman, has been introduced to oversee the application of the tax laws.
Restoring Order and Transparency
In his remarks, the Chairman of the National Tax Policy Implementation Committee, Mr Joseph Tegbe, described the signing as a decisive shift from policy intention to practical execution.
“With the signing of the presumptive tax guidelines, we have moved from legal provisions to operational reality,” Tegbe said.
He stressed that the reforms are about correcting systemic distortions rather than imposing new burdens on citizens. “It’s not about imposing new volumes but restoring order where there has been fragmentation and replacing arbitrariness with transparency,” he explained.
Tegbe highlighted the significance of the informal sector to the Nigerian economy, observing that it employs more than 80 per cent of the country’s workforce. However, its contribution to structured public revenue has remained disproportionately lowโnot due to unwillingness to pay, but because existing frameworks were either too complex or disconnected from operational realities.
“Sustainable development requires sustainable revenue mobilisation,” Tegbe said, pledging that the committee would work closely with tax authorities to ensure a disciplined and transparent rollout of the new framework. “With today’s signing, we move decisively from intention to execution.”
The reforms follow President Bola Tinubu’s signing of four sweeping tax reform bills into law in June 2025, including the Nigeria Tax Act and related statutes that collectively overhaul decades-old tax legislation and modernise the country’s tax system.
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