Federal Government Introduces Updated Presumptive Tax Guidelines for MSMEs

The federal government has launched revised presumptive tax regulations for Micro, Small, and Medium Enterprises (MSMEs) throughout Nigeria, positioning this initiative as a means to simplify tax compliance and facilitate a smoother transition into the formal economy.

The new tax framework was announced on Wednesday via a statement from the Minister of Finance and Coordinating Minister of the Economy, Wale Edun.

This update comes as part of the implementation of the Nigeria Tax Act 2025, which was designed to enhance tax compliance, modernize the existing tax structures, and standardize the tax system, effective from January 1.

During the announcement, the finance minister highlighted that there are no increases in tax rates, emphasizing that this new structure aims to guard millions of MSMEs across all states and the Federal Capital Territory from unfair taxation practices.

“Micro and small businesses form the backbone of Nigeria’s economy. This decision reduces compliance costs while establishing a clear route into the formal sector, easing the burden on enterprises,” he stated.

Mr. Edun further elaborated on the fiscal strategy, asserting that it is focused on broadening the tax base rather than raising rates. “Inclusion is vital for sustainability,” he remarked.

The new presumptive tax regulations will substitute complex record-keeping with easier turnover-band assessments for small businesses, abolish arbitrary enforcement through transparent national guidelines, and pave the way for greater access to credit, insurance, and expansion for informal businesses across the country.

Moreover, he noted that this tax initiative is integral to the government’s broader strategy to strengthen the economy. This includes enhancing fiscal sustainability and fostering a structured entry path into the formal economy for various trades, artisans, and service providers.

He also conveyed that a key element of this initiative is aligning federal and state tax administrations through the Joint Revenue Board, which serves to demonstrate the effectiveness of reforms to investors, stakeholders, and credit rating agencies.

“A more robust and diversified revenue stream will empower the government to finance infrastructure projects, social investments, security, and economic development,” the minister concluded.