Taxation
Ola Wale
The Federal Government of Nigeria has banned roadblocks for tax collection as part of a broader tax reform initiative. This move aims to eliminate coercive practices, enhance transparency, and support the formalization of informal economic activities. The ban is part of the Presumptive Tax Regulations and Guidelines, which provide a coordinated framework for tax collection across federal, state, and local governments .
Under the new framework, nano and small businesses with an annual turnover of ₦12 million and below are exempt from tax. Other informal businesses will pay a 1% tax on turnover. The regulations also prohibit cash tax collection, promoting technology-driven payment systems instead.
The Executive Secretary of the Joint Revenue Board, Olusegun Adesokan, emphasized that the regulations aim to protect small enterprises, encourage growth, and expand the tax base fairly. The Minister of Finance, Wale Edun, described the framework as a structural reform to broaden the tax base, simplify compliance, and protect small enterprises.
The new framework is expected to modernize tax administration, eliminate informal and coercive tax practices, and entrench equity and clarity in revenue collection. The government aims to widen the tax net, increase revenue, and support economic growth.
The ban on roadblocks is a significant shift, as it eliminates a long-criticized practice that disrupted businesses and transport operators. The government has introduced an ombudsman mechanism to oversee fair implementation of the tax laws.
The Presumptive Tax Framework is part of the tax reform programme under President Bola Tinubu’s administration, aiming to expand Nigeria’s tax base while protecting small businesses. The framework encourages formalization of the informal sector through a structured tax platform.
The regulations have been developed in collaboration with the Joint Revenue Board to ensure alignment between federal and state tax administrations. Implementation will be closely monitored to curb abuse and eliminate unofficial collections.
The government expects the new framework to strengthen non-oil revenue, enhance infrastructure development, security, and social investment.
