The Federal Government has banned the mounting of roadblocks to collect tax and levies nationwide. It also signed a new Presumptive Tax Framework(PTF) to bring millions of small and informal businesses into the formal economy. The goal of the framework is to simplify tax payments by traders, artisans and other micro enterprises.
Executive Secretary of the Joint Revenue Board (JRB), Olusegun Adesokan, made the announcements during the PTF signing at the Ministry of Finance in Abuja on Tuesday, March 3.
Adesokan said the framework prohibits the use of roadblocks by tax officials to collect levies, a practice that has long been criticised by businesses and transport operators.
“It also bans the mounting of roadblocks for the collection of taxes,” he said. Adesokan described the new framework as a major step in making the tax system fairer for ordinary Nigerians.
According to him, businesses with an annual turnover of up to N50 million will be exempted from tax under the new arrangement. “It ensures that our nano and small businesses with an annual turnover of 50 million naira are exempted from tax,” Adesokan said.
He explained that the exemption would allow struggling entrepreneurs to retain more capital to run and expand their businesses before eventually entering the tax system
For other categories of informal businesses that fall outside the exemption threshold, Adesokan said the framework introduces a simplified tax rate based on turnover.
He also said that the framework prohibits the use of cash for tax payment. “Apart from encouraging the use of technology for payment of taxes and cash collection, it bans all forms of cash collection by tax authorities,” he said.
Finance Minister and Coordinating Minister of the Economy, Wale Edun, described the PTF as part of the tax reform programme being implemented by the Bola Ahmed Tinubu administration to expand the nation’s tax base while protecting small businesses.
Edun said the new tax regime is meant to provide a simple and fair system that allows small businesses in the informal sector to comply with tax obligations without the burden of complex accounting requirements. According to him, the system will rely on clear indicators such as business category and turnover levels rather than complicated financial records.
“The objective of presumptive taxation is not to overburden small businesses, but to provide a fair, simple and predictable framework for tax compliance,” Edun said. He explained that the framework would help the government widen its tax base and strengthen non-oil revenue without increasing existing tax rates.
“Our fiscal strategy is anchored on expanding the tax base rather than increasing tax rates. Inclusion drives sustainability,” the minister said. The minister also said that the regulations would provide clarity for tax authorities across the country and protect taxpayers from arbitrary assessments.
Pointing out that small and micro enterprises form the backbone of Nigeria’s economy, Edun explained that the framework is designed to reduce compliance costs and create a structured pathway for them to enter the formal economy. “Micro and small businesses are the backbone of Nigeria’s economy. This framework reduces compliance costs and provides a structured pathway into the formal sector,” he said.
The minister also said that the regulations would provide clarity for tax authorities across the country and protect taxpayers from arbitrary assessments.
‘’These regulations provide clarity to tax authorities and protect taxpayers from arbitrary assessments. The system will be transparent, rules-based and nationally consistent,” he said.
Edun added that strengthening government revenue through a broader tax base would allow the government to invest more in infrastructure, security and social programmes.
“A stronger, more diversified revenue base enhances the government’s capacity to fund infrastructure, social investment, security and economic growth,” he said.