Nigeria's tax authorities have introduced a framework for simplified tax returns aimed at bringing micro-enterprises operating in the informal economy into the formal tax net.
The initiative targets small-scale traders, artisans, and service providers who have historically remained outside the formal tax system due to the complexity and cost of compliance. By reducing paperwork and streamlining filing obligations, the law seeks to lower the barriers that have kept many informal businesses from regularising their tax affairs.
The simplified return mechanism is designed to accommodate the realities of micro-enterprises, many of which lack sophisticated record-keeping systems or professional accounting support. The approach recognises that a one-size-fits-all compliance regime has proven ineffective for Nigeria's vast informal sector, which accounts for a significant share of economic activity.
By making tax compliance more accessible, the policy aims to broaden the tax base, improve domestic revenue mobilisation, and provide informal businesses with the benefits of formalisation, including access to credit, government support programmes, and legal recognition.
