Nigeria's tax framework is being adjusted to accommodate the country's vast informal sector through the introduction of simplified tax return mechanisms targeting micro-enterprises.
The legal provisions are designed to lower the compliance barrier that has historically kept small-scale traders, artisans, and micro-businesses outside the formal tax system. By streamlining the filing process, the law aims to make it easier for operators in the informal economy to register, report income, and meet their tax obligations without the complexity associated with standard corporate tax returns.
Formalising micro-enterprises through simplified compliance pathways is expected to broaden the tax base, improve government revenue, and provide informal business operators with the benefits that come with formal status — including access to credit, government contracts, and social protection schemes.
The move reflects a growing recognition that Nigeria's informal economy, which accounts for a significant share of employment and economic activity, requires a tailored approach rather than traditional enforcement measures that have yielded limited results.
