Nigeria Rolls Out Presumptive Tax Reform Under Tinubu’s Renewed Hope Agenda

Nigeria rolls out presumptive tax reform under Tinubu’s Renewed Hope Agenda The Federal Government has launched a new presumptive tax framework as part of the country’s 2026 tax reform programme, aimed at expanding the tax base, formalising the informal economy and boosting non-oil revenue.

The reform, introduced under the administration of Bola Ahmed Tinubu, is a key component of the government’s Renewed Hope Agenda to restructure Nigeria’s fiscal system and improve transparency in tax collection. The presumptive tax system is designed primarily for micro, small and medium enterprises (MSMEs) that operate largely outside the formal tax system. Under the new regulation, some small businesses will pay a flat tax based on turnover rather than complex accounting records, making tax compliance simpler and easier. Officials say the new framework will also help bring millions of informal businesses into the formal economy, providing them with access to credit, insurance and government support programmes.

Under the new rules, the government introduced a 1% presumptive tax on turnover for certain informal sector operators. However, nano and very small businesses with annual turnover of ₦12 million or less are exempted from the tax. The policy also bans cash tax collection and roadside tax enforcement, which authorities say had previously created corruption and harassment in some parts of the country. The presumptive tax regulation forms part of broader tax reforms signed into law in 2025 and implemented from January 2026. These reforms include several new tax acts aimed at simplifying Nigeria’s tax system and strengthening revenue generation. The government says the reforms will reduce the complexity of Nigeria’s tax system and improve compliance while supporting economic growth.

Nigeria has one of the lowest tax-to-GDP ratios in the world, meaning the government collects relatively little tax compared to the size of its economy. Experts say expanding the tax base rather than raising tax rates is necessary to improve public revenue and reduce reliance on borrowing.

Finance Minister Wale Edun said the policy is intended to ensure fairness and transparency while increasing participation in the country’s tax system Officials say the reform will help create a more predictable and inclusive tax system, strengthen non-oil revenue and support Nigeria’s long-term economic growth strategy. The government also maintains that the reforms are not designed to increase the tax burden, but to simplify tax administration and restore order to a fragmented system while encouraging more businesses to comply voluntarily.