Nigeria Launches New Tax Framework for MSMEs in 2025

On Wednesday, the Federal Government of Nigeria announced a new presumptive tax framework for micro, small, and medium enterprises (MSMEs) under the Nigeria Tax Act 2025, which will take effect on January 1. The announcement was made by Wale Edun, the Minister of Finance and Coordinating Minister of the Economy.

The new framework is designed to simplify compliance for MSMEs and provide a clearer pathway to the formal economy. It aims to protect small businesses from arbitrary assessments and encourages formal financing.

Edun emphasized that this framework will benefit millions of MSMEs across Nigeria's 36 states and the Federal Capital Territory without introducing higher tax rates. The initiative aligns with broader reforms to modernize and harmonize Nigeria's tax system, which has been criticized for its complexity and fragmentation.

The framework is a central pillar of efforts to diversify the economy, strengthen non-oil revenue sources, and promote fiscal sustainability. President Bola Tinubu is expected to present four bills, including the Nigeria Tax Bill, to support these reforms in June 2025.