The Honorable Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun has signed the Presumptive Tax Regulations framework, marking a significant milestone in Nigeria’s tax reform journey.
The Minister described the framework as simple, clear and fair, with a focus on economic inclusion, noting that, the reforms aim to protect small businesses and broaden the tax base without raising rates.
Transitioning from regular to structured implementation of the tax reforms” and providing a simple, increased transparent, fairness, clarity, economic inclusion, consistency and prevention of arbitrary taxation and equitable framework for the administration of presumptive tax, particularly within the informal sector.
The Presumptive Tax Regulations introduced a uniform framework for sub-national implementation and designed to:
- Exempt Nano and small businesses with annual turnover of ₦12 million and below from tax, ensuring protection for struggling entrepreneurs.
- Introduce a modest 1% tax on turnover for other eligible informal sector businesses.
- Eliminate cash-based tax collection practices by encouraging technology-driven payment systems.
- Prohibit the mounting of roadblocks or any informal means of tax enforcement.
- Facilitate seamless on-boarding of informal businesses into the formal economy through structured digital platforms.
Joint Tax Board will ensure coordinated implementation across federal and sub-national tax authorities, assuring stakeholders that enforcement would be monitored closely to guarantee fairness and consistency nationwide. New rules are meant to put an end to informal coersion and fragmented tax practices, particularly at the sub national level.
Guidelines bans all forms of cash collection by tax authorities”. It also bans the mounting of roadblocks for the collection of taxes, with the signing of these Presumptive Tax Guidelines, we have moved from legal provision to operational reality. National Tax Policy Implementation Committee will continue to work closely with tax authorities to ensure disciplined rollout, operational consistency, and safeguards against arbitrary assessments.