FG Introduces Presumptive Tax Regulations, Exempts Small Traders and Bans Roadblock Collections

Abuja – The Federal Government on Tuesday unveiled a new set of regulations aimed at bringing millions of informal businesses into the tax net while ending cash collections and roadside enforcement by state and local authorities. Officials described the move as a decisive shift from legislation to implementation.

At a signing ceremony in Abuja, Wale Edun, Minister of Finance and Coordinating Minister of the Economy, said the new presumptive tax rules mark the operational phase of tax reforms, following the passage of enabling Acts between mid-2025 and January 2026. He explained that the simplified framework is central to President Bola Tinubu’s growth agenda, expanding the tax base without raising rates.

“With the signing of these regulations, we are transitioning from legislation to the structural implementation of tax reforms,” Edun said. He noted that the guidelines are grounded in transparency, fairness, clarity, equity, and economic inclusion for all Nigerians. The minister added that the rules, issued under his office’s powers on the advice of the Joint Revenue Board, aim to ensure consistency across federal, state, and local governments, prevent arbitrary assessments, and protect small businesses.

Highlighting the economy’s trajectory, Edun noted Nigeria’s 4% growth in the final quarter of 2025, describing it as positive but below the administration’s near-term 7% target and long-term goal of a $1 trillion economy by 2030.

Olusegun Philip Adesokan, Executive Secretary of the Joint Revenue Board, described the regulations as a practical expression of the President’s stance that reforms should foster prosperity, not hardship. “He doesn’t seek to tax poverty… his government will not tax seeds, but fruits,” Adesokan said. He added that the framework establishes a uniform code for subnational governments to engage the informal sector.

Under the new rules, informal businesses with an annual turnover of up to N2 million are exempt from tax, shielding the most vulnerable operators and allowing them to retain more working capital. Other eligible informal businesses will pay a presumptive levy of 1% of turnover.

The guidelines also mandate the use of technology for payments, ban cash collections by tax officials, and prohibit roadblocks for tax enforcement — practices long criticized by traders and transport operators.

Adesokan said the reforms would create a seamless process for onboarding informal operators into the tax system and address disparities in collection practices across states, signalling a commitment to equity in tax administration.

Joseph Tegbe, Chairman of the National Tax Policy Implementation Committee, emphasized that the signing closes the gap between statutory provisions and practical execution. He noted that the informal sector, which accounts for more than 80% of employment, has historically contributed little to structured public revenue. “With today’s signing, we move decisively from intention to execution,” Tegbe said, adding that all 36 states have aligned on the guidelines.

Rather than increasing taxes, the government aims to widen compliance among micro and small enterprises, formalizing their entry into the tax system to provide structured pathways into the formal economy. Edun said this approach would improve access to growth opportunities while ensuring each taxpayer makes a fair contribution. Implementation will be closely monitored, with an ombudsman in place to safeguard fairness as the government pivots from economic stabilization to growth.