By Seun Ibiyemi
In a decisive move to curb arbitrary tax enforcement and protect small businesses, the federal government on Tuesday unveiled new presumptive tax regulations that ban cash collections and roadside enforcement by subnational authorities for informal businesses.
The announcement marks a major shift from legislation to practical implementation of Nigeria’s tax reforms.
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Speaking at a signing ceremony in Abuja, Finance Minister and Coordinating Minister of the Economy, Wale Edun, said the regulations are designed to expand the tax base while ensuring transparency and fairness.
“With the signing of these regulations, we are transiting from legislation to structural implementation of the tax reforms,” he said, adding that the guidelines promote equity and economic inclusion for all Nigerians.
The rules, issued under the authority of the Joint Revenue Board, prohibit subnational governments from levying taxes through roadside checkpoints or cash collections, practices that have long drawn criticism from traders and transport operators.
Payments are now required to be electronic, creating a structured and transparent pathway for informal businesses entering the tax system.
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Under the new framework, informal businesses with annual turnover up to N2 million are exempt, while others will pay a 1 per cent presumptive levy on turnover.
Officials stressed that the reforms are aimed at formalizing micro and small enterprises without overburdening them.
Executive Secretary of the Joint Revenue Board, Olusegun Philip Adesokan, described the ban as part of a uniform code for states.
“He doesn’t seek to tax poverty… his government will not tax seeds, but fruits,” Adesokan said, emphasizing that the move protects vulnerable operators while promoting compliance.
Chairman of the National Tax Policy Implementation Committee, Joseph Tegbe highlighted that the signing closes the gap between statutory provisions and practical execution.
“With today’s signing, we move decisively from intention to execution,” he said, noting the informal sector’s role as the backbone of Nigeria’s economy, providing over 80% of employment.
The ban on cash tax collections and roadblocks is expected to foster transparency, reduce harassment of business owners, and ensure a fairer, technology-driven tax administration across the country.
