Introduction to the New Tax Regulations
The Federal Government of Nigeria has taken a significant step forward in reforming its tax system. On Tuesday, it officially prohibited the cash collection of taxes and banned the use of roadblocks for revenue enforcement. This move is part of a broader set of regulations aimed at implementing the country’s new tax laws nationwide.
The announcement was made in Abuja by Mr. Olusegun Adesokan, the 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. These new rules are designed to address long-standing issues in tax administration, particularly in the subnational level.
Key Provisions of the New Framework
Adesokan emphasized that the new framework aims to end informal, coercive, and fragmented tax practices. “It bans all forms of cash collection by tax authorities. It also bans the mounting of roadblocks for the collection of taxes,” he stated. The regulations are intended to promote transparency and equity in tax administration, especially within the commerce and informal sectors.
One of the key aspects of the new framework is the exemption of nano and small businesses with an annual turnover of N12 million and below from taxation. “Our nano and small businesses with an annual turnover of N12m and below are exempted from tax,” Adesokan said. Additionally, the framework introduces a one percent tax rate on turnover for other categories of informal businesses, while encouraging the use of technology-driven payment systems.
Ministerial Perspective on the Reforms
The Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, highlighted the importance of the regulations in transitioning 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 described the regulations as a simple and transparent framework for applying presumptive tax, emphasizing that they were anchored on “transparency, fairness, clarity, indeed, equity, and economic inclusion for Nigerians.” The minister stressed that the reforms were not intended to raise tax rates but to broaden the tax base in a structured manner. “We’ll expand the tax base, not raising taxes, but expanding so that each bears his rightful contribution to the common cause,” he said.
Collaboration and Coordination
Edun noted that the regulations were developed in collaboration with the Joint Revenue Board to ensure alignment across federal, state, and local governments. “Our role is to ensure that tax administrations are coordinated, not fragmented, and deliver results and impact to all Nigerians,” he stated. He also linked the reforms to the government’s broader growth objectives, noting that economic expansion had exceeded four percent in the last quarter of 2025 but required further acceleration.
“We’re looking at, in the immediate term, to try to get to seven percent GDP growth on our way to Mr President’s clear-stated target… by 2030, the $1tn economy,” Edun said. He assured stakeholders that implementation would be closely monitored to safeguard fairness, adding that an ombudsman mechanism had been introduced. “Implementation will be monitored carefully. Fairness in practice… there’s an ombudsman to keep an eye on fair implementation of the tax laws,” he said.
Transition from Policy to Practice
In his closing 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 were not about imposing new burdens but correcting distortions in the system. “It’s not about imposing new volumes but restoring order where there has been fragmentation and replacing arbitrariness with transparency,” he said. Tegbe observed that the informal sector employs more than 80 percent of Nigeria’s workforce but has historically contributed little to structured public revenue due to systemic weaknesses.
“The informal sector… employs more than 80 per cent of the workforce… yet its contribution to structured public revenue has been disproportionately low, not because they are unwilling to pay but because our framework was either too complex or did not reflect operational realities,” he said. He added that sustainable development required sustainable revenue mobilisation and that the committee would work with tax authorities to ensure disciplined and transparent rollout of the new framework.
Historical Context of the Reforms
In June 2025, President Bola Tinubu signed four sweeping tax reform bills into law, including the Nigeria Tax Act and related statutes that together overhaul decades-old tax statutes and modernise the country’s tax system.
