By Damilare Adeleye
Analysts have lauded the recently signed Presumptive Tax Regulations, describing the policy as a pragmatic intervention aimed at broadening Nigeria’s tax base and formally integrating millions of operators within the informal economy.
Recall that on March 4, 2026, the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, signed the Presumptive Tax Regulations into law following the implementation of the Nigeria Tax Reform Acts.
Writing in the Andersen Digest published in BusinessDay, the Manager of Commercial Practice, Adedokun Abdullahi, and the Assistant Manager Commercial Practice, Nasrullah Bello, stated that the new framework “represents a strategic shift from the traditional profit-based taxation to a simplified estimation-based framework designed primarily for micro, small and medium enterprises.”
The analysts explained that the regulation introduces a simplified taxation model in which tax liability is presumed or estimated rather than derived from detailed financial records.
“Instead of relying on audited accounts, taxpayers are assessed to pay based on the nature of their businesses, turnover, business category, or fixed indicators, rather than actual profits,” they wrote.
Citing insights from the International Monetary Fund, they added that presumptive taxation is often deployed to curb tax evasion, demystify tax administration, and incentivise taxpayers to maintain proper financial records.
Abdullahi and Bello further highlighted key features of the 2026 presumptive tax regime, including the adoption of a turnover-based tax system, introduction of a flat tax rate, establishment of an exemption threshold, digitalisation of tax processes, elimination of arbitrary assessments, and harmonisation of tax administration across federal and subnational levels.
“This system replaces the complex profit-based assessment with turnover-based taxation for businesses in the informal sector. Hence, simplifying the compliance requirements of such businesses. The presumptive tax regime introduced an exemption threshold for nano and small businesses with an annual turnover of ₦25 million and below. This ensures that micro and small enterprises are exempt from the presumptive tax,” they added.
According to the experts, the regulation is expected to enhance revenue sustainability, improve transparency and governance, strengthen investor confidence, and significantly expand the tax net.
In their words, “With the regularisation of the taxation of the informal sector, Nigeria is shifting from raising taxes to expanding the tax base, targeting millions of previously untaxed businesses rather than increasing the burden through multiple taxation.”
While noting that the regime broadly aligns with global best practices in principle, the experts emphasised the need for the government to proactively address potential implementation risks, including compliance resistance, infrastructural constraints, and the imperative of building trust among informal sector participants.
“The Nigerian presumptive tax regime is designed to simplify taxation for small and medium businesses that may not keep detailed financial records, reduce tax compliance cost and mitigate multiplicity of taxes, while exempting nano businesses with annual turnover of ₦25 million and below,” they concluded.