FG Bans Roadblocks, Cash Tax Collection Nationwide

FG Bans Roadblocks, Cash Tax Collection Nationwide

The Federal Government of Nigeria has officially banned the mounting of roadblocks and the collection of taxes in cash nationwide, in a decisive move to modernise the country’s tax system, enhance transparency, and streamline revenue collection across federal, state, and local governments.

The announcement was made in Abuja by Mr Olusegun Adesokan, Executive Secretary of the Joint Revenue Board, during the signing of the Presumptive Tax Regulations and Implementation Guidelines. Adesokan said the new rules are designed to eliminate informal, coercive, and fragmented tax practices, particularly in the informal sector, and promote fairness and equity in tax administration.

“All forms of cash tax collection by authorities are now prohibited, alongside the use of roadblocks for revenue enforcement,” Adesokan explained, stressing that these reforms signal a nationwide shift toward technology-driven tax collection systems.

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Under the regulations, nano and small businesses with an annual turnover of ₦12 million or less are exempt from taxation, while other informal businesses are subject to a 1% tax on turnover. The reforms encourage the use of digital payments and the integration of operators into the formal economy through a Tax Identification Number (TIN) platform, ensuring uniform tax administration across states.

The Minister of Finance and Coordinating Minister of the Economy, Wale Edun, described the move as a shift from legislative approval of Nigeria’s 2025–2026 tax reforms to full implementation. Edun emphasised that the framework does not raise tax rates but broadens the tax base, prevents arbitrary assessments, protects small businesses, and supports economic growth.

Mr Joseph Tegbe, Chairman of the National Tax Policy Implementation Committee, said the reforms aim to restore order and replace arbitrary practices with transparency. He highlighted that the informal sector employs over 80% of Nigeria’s workforce, yet its contribution to structured public revenue remains low. The guidelines are intended to encourage compliance while strengthening revenue mobilisation for public services.

The ban on roadblocks, a longstanding method for informal tax enforcement, is expected to reduce harassment of traders and motorists, improve ease of doing business, and foster trust in government tax authorities. Observers say the shift to cashless, digital tax collection will curb corruption, enhance efficiency, and integrate informal operators into the formal economy.

FG Bans Roadblocks, Cash Tax Collection Nationwide