FG bans mounting of roadblocks to collect taxes

Edun noted that small and micro enterprises form the backbone of Nigeria’s economy and the new framework is designed to reduce compliance costs and create a structured pathway for them to enter the formal economy.

“Micro and small businesses are the backbone of Nigeria’s economy. This framework reduces compliance costs and provides a structured pathway into the formal sector,” he said.

He also explained that the regulations would provide clarity for tax authorities across the country and protect taxpayers from arbitrary assessments.

“These regulations provide clarity to tax authorities and protect taxpayers from arbitrary assessments. The system will be transparent, rules-based and nationally consistent,” he said.

Edun added that strengthening government revenue through a broader tax base would allow government to invest more in infrastructure, security and social programmes.

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“A stronger, more diversified revenue base enhances government’s capacity to fund infrastructure, social investment, security and economic growth,” he said.

He said the regulations were developed in collaboration with the Joint Revenue Board to ensure coordination between federal and state tax administrations.

“The regulations are being issued in collaboration with the Joint Revenue Board to ensure alignment between federal and state tax administrations,” Edun said.

Also speaking at the event, the Executive Secretary of the Joint Revenue Board, Mr. Olusegun Adesokan, described the new framework as a major step in making the tax system fairer for ordinary Nigerians.

Adesokan said the reform demonstrates the commitment of the Tinubu administration to ensure that the tax system supports economic growth rather than placing pressure on struggling citizens.

“This revolution is another demonstration of President Bola Ahmed Tinubu's commitment to taxing prosperity and not poverty,” he said.

He said the framework introduces clear rules for taxing the informal sector across states while protecting very small businesses.

According to him, businesses with an annual turnover of up to N50 million will be exempted from tax under the arrangement.

“It ensures that our nano and small businesses with an annual turnover of 50 million naira are exempted from tax,” Adesokan said.

He explained that the exemption would allow struggling entrepreneurs to retain more capital to run and expand their businesses before eventually entering the tax system.

“What this means is that our struggling people at the subnational level will have more disposable capital to run their businesses and eventually move into the tax net,” he said.

For other categories of informal businesses that fall outside the exemption threshold, Adesokan said the framework introduces a simplified tax rate based on turnover.

“It introduces a tax rate of one per cent turnover on all other categories of informal businesses,” he said.

He also said the regulations would modernise tax administration by promoting the use of technology in tax payments.

According to him, the framework prohibits the use of cash for tax collection and encourages electronic payment systems in order to improve transparency.

“Apart from encouraging the use of technology for payment of taxes and cash collection, it bans all forms of cash collection by tax authorities,” he said.

Adesokan added that the new system also prohibits the use of roadblocks by tax officials to collect levies, a practice that has long been criticised by businesses and transport operators.

“It also bans the mounting of roadblocks for the collection of taxes,” he said.

He explained that the framework is designed to make it easier for informal businesses to transition into the formal economy through a structured tax platform.

“It encourages the formalisation of the informal sector by putting in place a seamless manner to bring them into the formal economy through the tax platform,” Adesokan said.

He said state governments were supportive of the new framework because it provides a uniform structure for managing taxation in the informal sector across the country.

“The subnationals are very grateful that these regulations have been issued today. They constitute the framework for taxing the informal sector,” he said.

Adesokan added that the initiative would help strengthen trust in the tax system and show Nigerians that government is committed to fairness in tax administration.

“Our people will see that this government is truly committed to a fair and equitable tax administration system,” he said.

The presumptive tax framework is part of a wider fiscal reform programme aimed at improving revenue generation, formalising small businesses and reducing dependence on oil income.