Nigeria has introduced a new Presumptive Tax Framework aimed at incorporating small businesses, traders, and artisans into the formal tax system, the Finance Ministry announced on Wednesday.
The policy, outlined in an official document, is designed to simplify tax compliance for micro-enterprises by replacing complex record-keeping with a straightforward, predictable calculation method based on estimated turnover. A key provision explicitly prohibits tax officials from using roadblocks to collect levies, a practice often cited as a burden on informal sector operators.
Mr. Olusegun Adesokan, Executive Secretary of the Joint Revenue Board (JRB), emphasized this operational change, stating the framework bans the mounting of roadblocks for tax collection. Finance Minister Wale Edun, speaking at the scheme’s inauguration in Abuja on Tuesday, framed the initiative as part of a broader fiscal strategy. “The objective of presumptive taxation is not to overburden small businesses, but to provide a fair, simple, and predictable framework for tax compliance,” he said. “Our fiscal strategy is anchored on expanding the tax base rather than increasing tax rates. Inclusion drives sustainability.”
The framework represents a significant shift in revenue administration, targeting Nigeria’s vast informal economy where many small-scale operators remain outside the tax net due to administrative complexities and enforcement challenges. By offering a streamlined process, the government aims to increase voluntary compliance while curbing intrusive collection methods.
This move aligns with ongoing efforts to diversify government revenue away from over-reliance on oil. Expanding the tax base through sectors like small-scale trade and services is critical for enhancing fiscal stability and funding public services. The success of the presumptive system will depend on effective taxpayer education and the integration of simplified processes at state and local government levels, where much of the collection occurs.
The inauguration signals the operational start of the framework, with the Joint Revenue Board and state authorities tasked with implementation. For international observers, the policy highlights Nigeria’s focus on administrative reform as a tool for economic resilience, seeking to balance revenue generation with ease of doing business for the smallest enterprises.
