FG issues new presumptive tax rules for MSMEs

The federal government has issued new presumptive tax rules for Micro, Small, and Medium Enterprises (MSMEs) across Nigeria, saying the new move makes compliance simpler and makes a clear pathway into the formal economy.

The new tax regulation was disclosed on Wednesday in a statement signed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun.

The Nigeria Tax Act 2025, which aimed to improve tax compliance, modernise and unify the tax system, earlier came into effect on 1 January.

On Wednesday, the finance minister noted that while there are no tax rate increases, the new framework will protect millions of MSMEs across the 36 states and the FCT in the country from unfair tax 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.

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

According to the minister, the presumptive tax regulations will replace complex records with turnover-band assessments for small businesses, eliminate discretionary enforcement with clear, national rules, and open the door to credit, insurance, and growth for informal enterprises across the country.

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Mr Edun explained that the new tax move is part of the government’s strategic pillars in driving the country’s economy, which includes strengthening fiscal sustainability beyond oil dependency and ensuring structured entry into the formal economy for traders, artisans, and service providers.

He added that the strategic pillar of the new tax move includes making federal and state tax administrations aligned via the Joint Revenue Board and demonstrates reform execution to investors, partners, and credit rating agencies.

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