Reported by: Ijeoma G | Edited by: Oravbiere Osayomore Promise.
Abuja, Nigeria — The Federal Government has formally prohibited cash collection of taxes and banned the mounting of roadblocks for revenue enforcement as part of new regulations to implement updated tax laws. The directives were announced on Tuesday during the signing of the Presumptive Tax Regulations and Guidelines on the Implementation of Tax Laws at the Federal Ministry of Finance in Abuja.
The Executive Secretary of the Joint Revenue Board, Olusegun Adesokan, explained that the measures aim to eliminate unorthodox and coercive tax-collection methods that have been prevalent in some areas. All taxes must now be collected electronically or through digital channels, ending cash transactions that have previously been associated with corruption and inefficiency.
The use of roadblocks by tax officials to demand payments from motorists and traders has also been explicitly prohibited. This practice, long criticised for disrupting commerce and enabling extortion, will no longer be allowed as a means of revenue enforcement.
These reforms are part of a broader effort to modernise Nigeria’s tax administration, promote fairness, and extend coverage to previously under-taxed sectors of the economy. By standardising procedures and encouraging digital payments, the government aims to create a more predictable and accountable revenue system.
The new regulations introduce a presumptive tax regime for informal businesses. Traders and enterprises with annual turnover below a specified threshold of 12 million naira will be exempted from certain tax obligations, while those above the threshold will be subject to a one per cent tax rate on turnover. This measure seeks to broaden the tax base without imposing undue burdens on small enterprises.
Officials have emphasised that the regulations mark a transition from legislative approval to structured implementation, aiming to harmonise revenue collection across federal, state, and local levels. This approach is intended to reduce fragmentation and arbitrary assessments that have historically undermined compliance.
Business groups and civil society organisations have welcomed the ban on cash tax collection and roadblocks, noting that it could significantly reduce harassment of traders and commuters. Roadblocks have long been a source of frustration for transport operators, slowing down commerce and increasing costs.
Tax experts also highlighted that moving revenue collection into digital channels allows for clearer records, easier compliance tracking, and reduced leakage of public funds. The shift aligns with other government efforts to strengthen fiscal accountability, including the Treasury Single Account framework for centralised management of government receipts.
Critics of previous tax-collection methods have pointed out that informal practices, such as roadside checks and ad-hoc levies, contributed to low taxpayer morale and hindered investment, especially among informal businesses that form a large part of Nigeria’s economy. The new guidelines are intended to provide a uniform and transparent system that benefits both taxpayers and revenue authorities.
The Federal Government stated that the regulations take effect immediately and that all revenue agencies must comply. Officials reaffirmed their commitment to fairness and equity in tax administration, ensuring that citizens and businesses are treated consistently under the law.
By modernising procedures, eliminating informal practices, and encouraging digital compliance, the Federal Government is signalling a new approach to revenue governance focused on transparency, accountability, and economic inclusiveness.
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