By Achile Danjuma
In a landmark move to overhaul the nation’s tax administration, the Federal Government has officially prohibited the collection of taxes in cash and banned the use of roadblocks for revenue enforcement. The new directives form a core part of the regulations designed to implement Nigeria’s recently enacted tax laws.
The announcement was made on Tuesday in Abuja by Mr. Olusegun Adesokan, Executive Secretary of the Joint Revenue Board, during the formal signing of the Presumptive Tax Regulations and the Implementation Guidelines for the new tax laws at the Federal Ministry of Finance.
Mr. Adesokan stated that the new framework is specifically designed to eliminate the informal, coercive, and fragmented practices that have long plagued tax collection, particularly at the state and local government levels. “This new framework explicitly bans all forms of cash collection by tax authorities. It also prohibits the mounting of roadblocks for the purpose of collecting taxes,” he confirmed.
He explained that the regulations are a critical step toward embedding transparency and equity into the tax system, especially for businesses operating in the informal sector. “These regulations are another demonstration of [the government’s] commitment to taxing prosperity and not poverty,” Adesokan noted, highlighting the reform agenda’s focus on fairness.
Key provisions of the new regime include significant relief for small businesses. Mr. Adesokan clarified that nano and small businesses with an annual turnover of N12 million or less are now exempt from tax liabilities.
For other categories of informal businesses, the framework introduces a simplified, technology-friendly rate of one per cent on turnover. “It also introduces a tax rate of one per cent of turnover on all other categories of informal businesses, encouraging a shift toward technology-driven payment systems,” he added.
Furthermore, the guidelines establish a uniform structure for sub-national governments to use when taxing the commerce sector. By integrating these operators into a formal Tax Identification system, the policy aims to broaden the tax base while ensuring consistency across state lines. “These regulations constitute the framework for taxing the commerce sector,” Adesokan stated, noting that the consensus among states on this framework signals a new era of coordinated national tax policy.
Speaking at the signing ceremony, the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun, characterized the event as the pivotal shift from legislative approval to active enforcement. “With the signing of these regulations, we are transitioning from regulation to structured implementation of the tax reforms,” Edun said.
He lauded the new rules as a simple, clear, and transparent mechanism for applying presumptive tax. According to the Minister, the entire framework is anchored on core principles that will define Nigeria’s fiscal future: “transparency, fairness, clarity, indeed, equity, and economic inclusion for all Nigerians.”