Roadside tax collection outlawed as FG expands tax net

By Ezurike Ugochukwu

The Federal Government of Nigeria has banned the collection of taxes and levies on highways across the country while unveiling a new tax framework aimed at bringing millions of small and informal businesses into the formal economy.

The directive was announced alongside the signing of the Presumptive Tax Framework (PTF), a policy designed to simplify tax compliance for traders, artisans and other micro enterprises.

Executive Secretary of the Joint Revenue Board, Olusegun Adesokan, disclosed this during the signing ceremony held Tuesday at the Federal Ministry of Finance in Abuja.

Adesokan said the framework explicitly prohibits the mounting of roadblocks by tax officials for the purpose of collecting levies, a practice that has long drawn criticism from businesses and transport operators across the country.

“It also bans the mounting of roadblocks for the collection of taxes,” he stated, describing the policy as a major step toward building a fairer and more transparent tax system for ordinary Nigerians.

Under the new framework, businesses with an annual turnover of up to ₦50 million will be exempted from tax obligations. According to Adesokan, the exemption is intended to allow nano and small enterprises retain more capital to sustain and expand their operations before entering the formal tax structure.

“It ensures that our nano and small businesses with an annual turnover of 50 million naira are exempted from tax,” he explained.

For informal businesses that exceed the exemption threshold, the framework introduces a simplified tax regime based on turnover, eliminating complex accounting requirements that often discourage compliance.

Adesokan further revealed that the new system prohibits cash collection of taxes by authorities, mandating digital payment channels to improve transparency and reduce leakages.

“Apart from encouraging the use of technology for payment of taxes, it bans all forms of cash collection by tax authorities,” he said.

Nigeria’s Minister of Finance and Coordinating Minister of the Economy, Wale Edun, described the Presumptive Tax Framework as a central component of the tax reform agenda of President Bola Ahmed Tinubu aimed at widening the tax base while protecting small businesses.

According to Edun, the framework introduces a simple and predictable system that allows small businesses in the informal sector to meet tax obligations without complicated financial reporting processes.

“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.

He explained that the system would rely on clear indicators such as business category and turnover levels rather than detailed financial records.

“Our fiscal strategy is anchored on expanding the tax base rather than increasing tax rates. Inclusion drives sustainability,” the minister added.

Edun also said the regulations would provide clear guidance for tax authorities across the country while protecting taxpayers from arbitrary assessments.

“Micro and small businesses are the backbone of Nigeria’s economy. This framework reduces compliance costs and provides a structured pathway into the formal sector,” he noted.

He added that strengthening government revenue through a broader and more diversified tax base would enable increased investment in infrastructure, security and social programmes.

“A stronger, more diversified revenue base enhances the government’s capacity to fund infrastructure, social investment, security and economic growth,” Edun said.