FG Bans Cash Tax Collections, Roadblocks as Presumptive Tax Regime Rolls Out Nationwide

Abuja – The Federal Government has formally prohibited all forms of cash collection of taxes and banned the mounting of roadblocks for revenue enforcement as part of fresh regulations to implement Nigeria’s new tax laws across the federation.

The announcement was made on Tuesday in Abuja by the Executive Secretary of the Joint Revenue Board, Mr Olusegun Adesokan, during the official signing of the Presumptive Tax Regulations and Guidelines on the Implementation of the Tax Laws at the Federal Ministry of Finance.

NaijaChoice News reports that the new framework seeks to dismantle decades of informal, coercive and fragmented tax practices, especially at the sub-national level, while entrenching transparency, equity and fairness in tax administration, particularly in the commerce and informal sectors.

“It bans all forms of cash collection by tax authorities. It also bans the mounting of roadblocks for the collection of taxes,” Adesokan declared, stressing that the regulations represent another demonstration of the Federal Government’s commitment to “taxing prosperity and not poverty.”

Under the presumptive tax regime, nano and small businesses with an annual turnover of N12 million and below are fully exempted from tax. Other categories of informal businesses will now pay a flat one per cent tax on turnover, with strong encouragement for the use of technology-driven payment platforms to ensure seamless and transparent transactions.

Adesokan further explained that the guidelines provide a uniform structure for states and local governments in taxing the commerce sector while integrating operators into the formal economy through a simplified Tax Identification platform.

Speaking at the high-level ceremony, the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, described the signing as a critical transition from legislative approval to full operational enforcement of the tax 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, adding that the framework is anchored on “transparency, fairness, clarity, indeed, equity, and economic inclusion for Nigerians.”

The minister emphasised that the reforms are not about increasing tax rates but expanding the tax base in an organised manner so that every Nigerian bears his or her rightful contribution to national development.

“We’ll expand the tax base, not raising taxes, but expanding so that each bears his rightful contribution to the common cause,” he stated.

Edun disclosed that the regulations were crafted in close collaboration with the Joint Revenue Board to guarantee coordination across federal, state and local governments, while an ombudsman mechanism has been introduced to monitor implementation and address any issues of unfairness.

He linked the new measures to the government’s broader economic agenda, noting that GDP growth had already surpassed four per cent in the last quarter of 2025, with immediate plans to push it to seven per cent on the path to President Bola Tinubu’s $1 trillion economy target by 2030.

In his remarks, the Chairman of the National Tax Policy Implementation Committee, Mr Joseph Tegbe, hailed the development as a decisive shift from policy to practical execution.

“With the signing of the presumptive tax guidelines, we have moved from legal provisions to operational reality,” Tegbe said.

He pointed out that the informal sector, which employs more than 80 per cent of Nigeria’s workforce, has historically contributed disproportionately little to structured public revenue not because operators are unwilling to pay, but due to a complex and unrealistic framework.

“It’s not about imposing new burdens but correcting distortions in the system… replacing arbitrariness with transparency,” Tegbe added.

The development is a direct fallout of the four landmark tax reform bills signed into law by President Bola Ahmed Tinubu in June 2025 – the Nigeria Tax Act, Nigeria Tax Administration Act, Nigeria Revenue Service (Establishment) Act, and Joint Revenue Board (Establishment) Act – which collectively repealed outdated statutes and modernised the country’s tax system for greater efficiency and inclusiveness.

Stakeholders believe the measures will significantly reduce multiple taxation and harassment of traders and transporters on Nigerian roads while bringing millions of small businesses into the formal fold without placing undue burden on the vulnerable.