Nigeria's tax framework has been updated to include simplified tax return provisions aimed at drawing the country's expansive informal sector into the formal economy.
The reform targets micro-enterprises and small-scale operators—often referred to as the informal hustle—who have historically remained outside the tax net due to complex filing requirements and compliance costs. Under the updated legal framework, qualifying micro-businesses can now fulfil their tax obligations using streamlined returns that reduce paperwork and administrative hurdles.
The simplified return mechanism is designed to lower the barrier to entry for millions of informal traders, artisans, and service providers who generate taxable income but lack the resources or expertise to navigate conventional tax filing processes.
By making compliance more accessible, the government expects to widen the tax base significantly while offering micro-enterprises a pathway to formal recognition—which can, in turn, unlock access to credit, government contracts, and other benefits tied to formal business registration.
The move aligns with broader fiscal policy objectives of improving Nigeria's low tax-to-GDP ratio without imposing new taxes on an already strained small-business sector.
