FG Bans Roadblocks for Tax Collection

FG Bans Roadblocks for Tax Collection

The Federal Government of Nigeria on Tuesday formally banned the use of roadblocks by tax officials to collect levies nationwide, as part of a wider effort to modernize tax administration and bring small and informal businesses into the formal economy.

The announcement coincided with the signing of a new Presumptive Tax Framework at the Ministry of Finance in Abuja, designed to simplify taxation for traders, artisans, and micro enterprises.

Speaking at the ceremony, Executive Secretary of the Joint Revenue Board (JRB), Mr. Olusegun Adesokan, said the framework prohibits roadblocks for tax collection, a practice long criticized by businesses and transport operators.

“It also bans the mounting of roadblocks for the collection of taxes,” Adesokan emphasized, noting that the framework provides clear rules for taxing the informal sector while protecting very small businesses.

The new system exempts businesses with annual turnover of up to N50 million from taxation, allowing entrepreneurs to retain more capital for growth. For other informal businesses above the threshold, a simplified tax rate of 1 percent of turnover applies.

Minister of Finance and Coordinating Minister of the Economy, Wale Edun, described the reform as a key component of the Tinubu administration’s tax expansion program.

“The objective of presumptive taxation is not to overburden small businesses, but to provide a fair, simple, and predictable framework for tax compliance,” Edun said. “Our fiscal strategy is anchored on expanding the tax base rather than increasing tax rates. Inclusion drives sustainability.”

He added that the framework encourages the use of technology in tax payments and bans cash collection by tax authorities, promoting transparency and efficiency in the system.

According to Adesokan, the initiative also provides a structured pathway for informal businesses to transition into the formal economy, strengthening trust between taxpayers and government.

“This framework reduces compliance costs, provides clarity for tax authorities, and demonstrates that the government is committed to taxing prosperity, not poverty,” he said.

The regulations were developed in collaboration with the JRB to ensure alignment between federal and state tax administrations. Edun noted that strengthening revenue through a broader tax base will allow the government to invest more in infrastructure, social programs, and security.

The new Presumptive Tax Framework forms part of a wider fiscal reform aimed at formalizing small businesses, expanding the nation’s tax base, and reducing dependence on oil revenue.