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The Federal Government has formally banned cash-based tax collections and prohibited the mounting of roadblocks for revenue enforcement, as part of sweeping measures to operationalise Nigeria’s newly enacted tax reforms.
The announcement was made in Abuja by the Executive Secretary of the Joint Revenue Board, Mr. Olusegun Adesokan, during the signing of the Presumptive Tax Regulations and Guidelines at the Federal Ministry of Finance.
According to Adesokan, the regulations are designed to eliminate informal, coercive and fragmented tax practices—particularly at the state and local government levels.
“It bans all forms of cash collection by tax authorities. It also bans the mounting of roadblocks for the collection of taxes,” he stated.
Presumptive Tax Regime Targets Informal Sector
At the core of the new framework is a presumptive tax model aimed at improving compliance while protecting vulnerable businesses.
Under the regulations:
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Nano and small businesses with an annual turnover of ₦12 million and below are exempt from tax.
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A one per cent turnover tax will apply to other informal sector operators.
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Technology-driven payment systems will be prioritised to ensure transparency and traceability.
Adesokan said the reforms are intended to “entrench transparency and equity” in tax administration, especially within the commerce and informal sectors. He added that the alignment of subnational governments behind the framework signals a coordinated national effort to standardise tax practices.
The guidelines also introduce a unified structure for integrating commerce operators into the formal economy through a Tax Identification platform
From Legislation to Implementation
Speaking at the ceremony, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, described the signing as a transition from legislative approval to structured enforcement of reforms enacted in 2025 and early 2026.
“With the signing of these regulations, we are transitioning from regulation to structured implementation of the tax reforms,” Edun said.
He emphasised that the framework is anchored on transparency, fairness and inclusion, stressing that the objective is not to increase tax rates but to broaden the tax base in a more organised manner.
“We’ll expand the tax base—not raising taxes—but ensuring that each bears his rightful contribution to the common cause,” he noted.
Edun further explained that the regulations were developed in collaboration with the Joint Revenue Board to promote coordination across federal, state and local tax authorities, reducing duplication and arbitrary assessments.
Safeguards and Oversight
To ensure fair implementation, the Minister disclosed that an ombudsman mechanism has been introduced to monitor compliance and address grievances.
“Implementation will be monitored carefully… there’s an ombudsman to keep an eye on fair implementation of the tax laws,” he said.
The Chairman of the National Tax Policy Implementation Committee, Mr. Joseph Tegbe, described the move as a decisive shift from policy intention to operational reality.
“It’s not about imposing new burdens but restoring order where there has been fragmentation and replacing arbitrariness with transparency,” Tegbe said.
He observed that while Nigeria’s informal sector employs over 80 per cent of the workforce, its contribution to structured public revenue has remained disproportionately low due to systemic inefficiencies rather than unwillingness to pay.
Broader Economic Context
The reforms follow the signing of four major tax reform bills in June 2025 by President Bola Tinubu, including the Nigeria Tax Act and related statutes aimed at modernising decades-old tax frameworks.
Edun linked the tax overhaul to broader growth ambitions, noting that Nigeria recorded over four per cent GDP growth in the final quarter of 2025, with a medium-term target of accelerating expansion toward a $1 trillion economy by 2030.
As Nigeria advances its tax modernisation agenda, the prohibition of cash collections and revenue roadblocks marks a significant step toward digitised, rules-based revenue administration—an important signal for investors, businesses and subnational authorities navigating the country’s evolving fiscal landscape.
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