The Federal Government has introduced a presumptive tax framework for Micro, Small and Medium Enterprises (MSMEs) to simplify compliance and encourage more businesses to enter the formal economy.
The initiative was announced by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, as part of the implementation of the Nigeria Tax Act 2025, which took effect on January 1.
Edun said the framework will benefit millions of MSMEs across Nigeria without increasing tax rates.
“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 said.
Under the new system, small businesses will be taxed using turnover-based bands instead of complex bookkeeping requirements. The approach is expected to reduce administrative burdens, eliminate discretionary tax assessments, and improve transparency.
The framework will also align federal and state tax authorities through the Joint Revenue Board to ensure uniform implementation nationwide.
The reform is part of broader tax changes signed into law in 2025 by President Bola Ahmed Tinubu to modernise Nigeria’s tax system and expand the country’s non-oil revenue base.
