The Federal Government has disclosed plans to introduce tax exemption cards for small businesses and informal operators under Nigeria’s ongoing tax reform
This comes as part of efforts to shield low-income earners from multiple taxes and levies.
This was revealed by the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, while speaking on a Channels Television programme on Wednesday.
According to him, the reform is deliberately designed to shift Nigeria’s tax system away from what he described as a regressive structure that disproportionately taxes the most vulnerable.
Oyedele said resistance to the reforms has been fuelled by misinformation and manipulation, even though the biggest beneficiaries are low-income earners and small businesses.
What Oyedele is saying
Oyedele argued that with limited enforcement capacity, the government must prioritise high-yield taxpayers rather than low-income Nigerians.
He noted that official data from the Nigeria Deposit Insurance Corporation (NDIC) shows that about 98% of bank account holders in Nigeria do not have up to N500,000 in their accounts.
“Those are the people fighting the reform,” he said, adding that many wealthy individuals who earn significant income quietly mobilise public opposition to avoid paying taxes.
According to him, some content creators earning as much as $10,000 monthly oppose the reforms but frame the debate as though ordinary Nigerians’ bank accounts will be arbitrarily debited.
Oyedele dismissed such claims, stressing that the tax reform does not allow the government to debit bank accounts automatically.
“At the end of the year, you tell the government your income. If you’re exempted, you simply declare your income and state that you are exempt,” he said.
Tax exemption cards for small businesses
A major highlight of the reforms, according to Oyedele, is the protection of small businesses and informal operators.
He explained that under the new presumptive tax regime, businesses with an annual turnover of N12 million or less will be deemed to lack the capacity to pay tax.
He clarified that turnover is not profit and that such businesses must first cover costs and operating expenses.
To avoid abuse by tax officials, Oyedele said the government has gone further to specifically list categories of micro-businesses that are effectively non-taxable.
Examples include vulcanisers, roadside food vendors, and other informal operators whose businesses generate minimal income even under full operation.
“What we are planning to do is for them to get tax exemption stickers, so nobody will bother them,” Oyedele said.
Harmonising taxes at the sub-national level
Oyedele also linked the exemption initiative to ongoing efforts to harmonise taxes and levies at the state and local government levels.
- He said the Federal Government, working with the Joint Revenue Board, drafted a harmonised tax framework for sub-national governments, even though the Constitution prevents the centre from dictating to states.
- According to him, several states have already moved swiftly to enact harmonised taxes and levies laws, including Ekiti, Zamfara, Anambra, Kano, and others, with Lagos State also indicating plans to follow suit.
- The goal, he said, is to end arbitrary levies and harassment of small business owners.
What you should know
- In alignment with the tax reforms at the federal level, Nairametrics earlier reported that Anambra State had emerged as the third state in Nigeria to adopt the Harmonised Taxes and Levies Law.
- Before Anambra, Zamfara State Governor, Dauda Lawal, had signed a similar revenue reform law, reinforcing a broader alignment with President Bola Ahmed Tinubu’s national tax reform agenda.
- Last week, Ekiti State became the first subnational entity in Nigeria to domesticate the Nigeria Tax Administration Act (NTAA) as Governor Biodun Oyebanji signed the Ekiti State Revenue Administration Law, 2025.
