The Federal Government has rolled out new presumptive tax regulations designed to make tax compliance easier, fairer, and less burdensome for Micro, Small, and Medium Enterprises (MSMEs) nationwide.
Announced on Wednesday by the Federal Ministry of Finance via its official X account, the rules were issued by the Minister of Finance and Coordinating Minister of the Economy, Mr. Wale Edun.
“Big news for small businesses,” the ministry stated. “Hon. Wale Edun has issued new Presumptive Tax Rules: simpler compliance, no rate increases, and a clear pathway into the formal economy for MSMEs across Nigeria. Our fiscal strategy is anchored on expanding the tax base rather than increasing tax rates. Inclusion drives sustainability.”
Under the new framework, presumptive tax will be based on business turnover, removing the need for complex record-keeping and reducing the scope for arbitrary assessments or enforcement.
Key features include:
Nano and small enterprises with annual turnover below N12 million are exempt from the presumptive tax.
Eligible businesses above the exemption threshold will pay a flat 1% rate on turnover.
Nationwide prohibition on cash tax collections and roadblocks by tax officials to eliminate harassment and informal levies.
The initiative aligns with President Bola Tinubu’s Renewed Hope Agenda, which seeks to bring Nigeria’s large informal sector, estimated to employ over 80% of the workforce into the formal economy.
By simplifying compliance and expanding the tax base without raising rates, the government aims to encourage formal registration, improve access to credit, insurance, and other financial services, and support sustainable business growth.
The new rules build on earlier efforts, including the 1% presumptive tax introduced for the informal sector and existing bans on roadblocks, reflecting a broader push toward inclusive and transparent taxation.
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