FG prohibits roadblocks tax enforcement, introduces 1% tax on turnover for informal sector
The Federal Government has prohibited the mounting of roadblocks and other informal methods of tax enforcement, while introducing a one per cent tax on turnover for eligible informal sector operators under a new presumptive tax regime.
The Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, announced this on Tuesday in Abuja during the signing of the Presumptive Tax Regulations Framework at the Federal Ministry of Finance. He described the development as a major milestone in Nigeria’s tax reform drive and a shift from policy design to structured implementation.
Edun said the framework was crafted to be simple, clear and fair, with strong emphasis on economic inclusion. According to him, the reforms are anchored on President Bola Ahmed Tinubu’s commitment to “taxing prosperity, not poverty”, with safeguards to protect nano and small enterprises while promoting transparency and consistency in tax administration.
Under the new regulations, businesses with an annual turnover of ₦12 million and below are exempted from tax. Other eligible operators in the informal sector are to pay a modest one per cent tax on turnover. The guidelines also ban cash-based tax collection and expressly prohibit the use of roadblocks or other informal enforcement mechanisms, in favour of technology-driven payment systems.
The minister explained that the framework would support the seamless onboarding of informal businesses into the formal economy through structured digital platforms, reduce arbitrary taxation and improve fairness across the system.
He disclosed that Nigeria recorded economic growth of over four per cent in the last quarter of 2025, describing it as positive momentum. Edun added that the government is targeting seven per cent GDP growth in the near term as part of efforts to achieve the administration’s goal of building a $1 trillion economy by 2030.
“We must grow the Nigerian economy across all sectors — micro, small, medium and large enterprises; domestic and foreign investors; and Nigerians in the diaspora. A fair and predictable tax system is critical to that growth,” the minister said.
Earlier, the Executive Secretary of the Joint Revenue Board, Mr Olusegun Adesokun, said the new rules would end informal coercion and fragmented tax practices, particularly at the sub-national level. Chairman of the National Tax Policy Implementation Committee, Mr Joseph Tegbe, noted that the signing marked a transition from legal provision to operational reality, adding that stakeholders across tax authorities were present at the event.
