By Ayo Kehinde
The Federal Government has taken decisive steps to sanitise Nigeria’s tax administration system by banning cash payments for taxes and outlawing the use of roadblocks for revenue enforcement nationwide.
The new directive forms part of regulations issued to implement the country’s updated tax laws and curb informal, coercive and fragmented tax practices, particularly at the sub-national level.
The Executive Secretary of the Joint Revenue Board, Olusegun Adesokan, announced the measures on Tuesday, during the signing of the Presumptive Tax Regulations and Guidelines at the Federal Ministry of Finance in Abuja.
Adesokan said the regulations are designed to promote transparency, fairness and uniformity in tax administration, especially for businesses operating within the commerce and informal sectors. He noted that the reforms would eliminate arbitrary tax assessments and streamline revenue collection processes across states.
“It bans all forms of cash collection by tax authorities. It also bans the mounting of roadblocks for the collection of taxes”, he declared, describing the practice as inconsistent with modern tax administration standards.
Under the new framework, nano and small businesses with an annual turnover of N12 million or less are exempted from the presumptive tax.
Other informal businesses will pay a one percent tax on turnover and are encouraged to adopt technology-driven payment platforms to enhance compliance and accountability.
Adesokan explained that the guidelines also provide a uniform structure for states to tax the commerce sector while integrating operators into the formal economy through a tax identification platform.
Also speaking at the event, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, said the signing marked a transition from legislative approval to structured implementation of tax reforms. He described the framework as simple, clear and fair, with a focus on economic inclusion and growth.
“Our aim is to ensure consistency, prevent arbitrary assessments and protect small businesses while ensuring the continuous growth of the Nigerian economy”, Edun said, adding that the reforms seek to broaden the tax base without increasing tax rates.
On his part, Chairman of the National Tax Policy Implementation Committee, Mr Joseph Tegbe, described the development as a decisive shift from policy to practice. He stressed that the reforms are about correcting distortions and replacing arbitrariness with transparency rather than imposing new burdens on citizens.
Tegbe highlighted the importance of the informal sector, which employs more than 80 percent of Nigeria’s workforce but has historically contributed minimally to structured public revenue. He expressed optimism that the new measures would enhance compliance, build trust in the tax system and strengthen revenue generation for sustainable national development.
