New Tax Regulations Aim to Modernize Nigeria’s Revenue Collection
The Nigerian Federal Government has taken a significant step towards modernizing its tax collection system by formally prohibiting the cash collection of taxes and banning the use of roadblocks for revenue enforcement. This move is part of a broader initiative to implement the country’s new tax laws nationwide, aiming to bring transparency, fairness, and efficiency to the taxation process.
The announcement was made in Abuja during the signing of the Presumptive Tax Regulations and Guidelines on the Implementation of the Tax Laws at the Federal Ministry of Finance. The event was attended by key stakeholders, including the Executive Secretary of the Joint Revenue Board, Mr. Olusegun Adesokan, who emphasized the importance of these reforms.
Key Provisions of the New Tax Framework
Adesokan highlighted that the new framework is designed to eliminate informal, coercive, and fragmented tax practices, especially at the subnational level. He stated that the regulations prohibit all forms of cash collection by tax authorities and also ban the mounting of roadblocks for the purpose of collecting taxes. These measures are intended to entrench transparency and equity in tax administration, particularly within the commerce and informal sectors.
One of the most notable aspects of the new framework is the introduction of a presumptive tax regime. Under this system, nano and small businesses with an annual turnover of N12 million and below will be exempted from paying taxes. For other categories of informal businesses, a one percent tax rate on turnover has been introduced. Additionally, the guidelines encourage the use of technology-driven payment systems to streamline the process.
Benefits for Small Businesses and the Informal Sector
The new regulations also provide a uniform structure for subnational governments in taxing the commerce sector. They aim to integrate 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 reform.
Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, described the signing of the regulations as a transition from legislative approval to operational enforcement of the tax reforms enacted in 2025 and early 2026. He emphasized that the framework is simple and transparent, anchored on principles of transparency, fairness, clarity, equity, and economic inclusion.
Edun clarified that the reforms are not aimed at increasing tax rates but rather at broadening 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 Monitoring Mechanisms
The regulations were developed in collaboration with the Joint Revenue Board to ensure alignment across federal, state, and local governments. Edun stressed the importance of coordinated tax administrations to deliver results and impact to all Nigerians. He also assured stakeholders that implementation would be closely monitored to safeguard fairness, with an ombudsman mechanism introduced to oversee the fair implementation of the tax laws.
Transition from Policy to Practical Execution
Joseph Tegbe, Chairman of the National Tax Policy Implementation Committee, described the signing of the presumptive tax guidelines as a decisive shift from policy intention to practical execution. He emphasized that the reforms are 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,” Tegbe said.
Tegbe pointed out that the informal sector employs more than 80 per cent of Nigeria’s workforce but has historically contributed little to structured public revenue due to systemic weaknesses. He added that sustainable development requires sustainable revenue mobilization, and the committee will work with tax authorities to ensure a disciplined and transparent rollout of the new framework.
Broader Economic Goals
In June 2025, President Bola Tinubu signed four sweeping tax reform bills into law, including the Nigeria Tax Act and related statutes that overhaul decades-old tax statutes and modernize the country’s tax system. These reforms are seen as critical to achieving the government’s broader growth objectives, including accelerating economic expansion to reach a target of seven percent GDP growth and ultimately building a $1 trillion economy by 2030.
