The Federal Government has unveiled a new tax framework imposing a one per cent presumptive tax on eligible informal sector businesses, while banning cash-based tax collection and roadside enforcement across the country.
The new regulations, rolled out by the Joint Revenue Board, are designed to streamline tax administration in the informal sector and harmonise revenue collection at federal, state and local government levels.
Under the guidelines, nano and small businesses with an annual turnover of ₦12 million and below are exempted from paying tax. However, other eligible informal businesses will be required to pay a flat one per cent levy on their annual turnover.
In a major shift from previous practices, the government has outlawed cash collections by revenue agents and prohibited the setting up of roadblocks or other informal enforcement mechanisms often used to collect levies. All payments are to be made through approved digital platforms to enhance transparency, accountability and efficiency.
Officials said the reform aims to widen the tax base without increasing tax rates, reduce arbitrary assessments, and curb revenue leakages. The move is also expected to integrate more informal operators into the formal economy while creating a more predictable and business-friendly environment.
The government maintained that the initiative represents a transition from policy formulation to structured implementation, noting that improved coordination among revenue authorities would ensure fairness and consistency in tax administration nationwide.
Stakeholders in the informal sector are expected to receive further sensitisation on compliance procedures as implementation begins.
