MSMEs: FG unveils presumptive tax framework under Nigeria Tax Act 2025

The federal government has rolled out new presumptive tax rules for Micro, Small, and Medium Enterprises (MSMEs) across Nigeria, aiming to simplify compliance and provide a clearer pathway into the formal economy.

The announcement was made on Wednesday in a statement issued by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun.

The Nigeria Tax Act 2025, which seeks to modernise, harmonise, and improve tax compliance in the country, came into effect on 1 January.

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The new framework is designed to protect small businesses from arbitrary assessments while encouraging formalisation.

**What the Minister is saying **

The finance minister highlighted that the new framework will benefit millions of MSMEs across the 36 states and the Federal Capital Territory without introducing higher 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.” _
• _“Our fiscal strategy is anchored on expanding the tax base rather than increasing tax rates. Inclusion drives sustainability.” _
• _“The presumptive tax regulations replace complex records with turnover-band assessments for small businesses, eliminate discretionary enforcement, and open the door to credit, insurance, and growth for informal enterprises.” _

Edun further stated that the framework aligns federal and state tax administrations through the Joint Revenue Board, demonstrating reform execution to investors, partners, and credit rating agencies.

**Get up to speed **

Nigeria’s tax system has long been fragmented, with complex procedures that made compliance difficult for small and informal businesses.

• Historically, many MSMEs faced inconsistent enforcement and high administrative burdens, which limited their access to financial services and slowed growth.
• The Nigeria Tax Act 2025 was introduced to address these challenges by modernising the system, unifying federal and state tax rules, and making it easier for small businesses to enter the formal economy.

The new presumptive tax framework forms a central pillar of this broader reform effort.

**More Insights **

The presumptive tax system simplifies taxation by replacing detailed bookkeeping with turnover-based bands, reducing administrative complexity for small businesses.

• MSMEs across all 36 states and the FCT will now operate under consistent, nationwide rules.
• Clear tax bands eliminate discretionary enforcement, fostering transparency and fairness.
• Alignment between federal and state authorities through the Joint Revenue Board ensures uniform application and reduces duplication.

This framework also supports Nigeria’s economic diversification by strengthening non-oil revenue sources and promoting fiscal sustainability.

**What you should know **

In June 2025, President Bola Tinubu signed into law four tax reform bills on key areas of Nigeria’s fiscal and revenue framework.

The four bills include: the Nigeria Tax Bill, the Nigeria Tax Administration Bill, the Nigeria Revenue Service (Establishment) Bill, and the Joint Revenue Board (Establishment) Bill.