LAGOS, NIGERIA – As the 2026 tax landscape takes shape, the Centre for the Promotion of Private Enterprise (CPPE) has issued a strategic warning to the Federal Government: do not weaponize the new laws against the informal sector.
In a comprehensive statement released on Sunday, January 4, 2026, the CPPE Chief Executive Officer, Dr. Muda Yusuf, argued that while the new tax framework contains “commendable and pro-welfare” pillars, a blanket enforcement strategy could criminalize millions of small businesses and derail the reform’s credibility.
The Pro-Welfare Upside
The CPPE acknowledged that the 2026 reforms offer significant social protections, including:
The CPPE acknowledged that the 2026 reforms offer significant social protections, including:
- Total Tax Exemption: Low-income earners are officially shielded from Personal Income Tax.
- VAT Relief: Essential goods and services in education, healthcare, agriculture, and culture are now VAT-free.
- SME Support: Small businesses have been granted relief from Company Income Tax and VAT obligations to ease their survival in a competitive market.
The “Informal” Reality Check
Despite these benefits, Dr. Yusuf highlighted a massive “literacy and digital gap” in Nigeria’s economy. With over 90% of jobs tied to the informal sector and an estimated 40 million micro-enterprises operating without structured record-keeping, the CPPE warns that mandatory filing and penalties could backfire.
Despite these benefits, Dr. Yusuf highlighted a massive “literacy and digital gap” in Nigeria’s economy. With over 90% of jobs tied to the informal sector and an estimated 40 million micro-enterprises operating without structured record-keeping, the CPPE warns that mandatory filing and penalties could backfire.
“Businesses are largely cash-based and lack the capacity to digest technical tax concepts,” the statement noted. “Without careful sequencing, these provisions risk criminalizing informality rather than encouraging voluntary formalization.”
The ₦25 Million Bank Reporting Anxiety
The CPPE also flagged rising anxiety among SMEs over the new requirement for banks to report quarterly transactions of ₦25 million and above. The Centre warned that high-turnover, low-margin businesses—especially those handling custodial or “pass-through” funds—could face undue scrutiny and costly disputes over money that does not actually constitute profit.
The CPPE also flagged rising anxiety among SMEs over the new requirement for banks to report quarterly transactions of ₦25 million and above. The Centre warned that high-turnover, low-margin businesses—especially those handling custodial or “pass-through” funds—could face undue scrutiny and costly disputes over money that does not actually constitute profit.
The “80/20” Strategy
Instead of a “policing” approach, the CPPE is advocating for Revenue Efficiency.
“Roughly 20% of businesses generate close to 90% of tax receipts,” Dr. Yusuf stated. The Centre urged the government to concentrate enforcement on large corporations and high-net-worth individuals to secure revenue without destabilizing the livelihoods of the masses.
Instead of a “policing” approach, the CPPE is advocating for Revenue Efficiency.
“Roughly 20% of businesses generate close to 90% of tax receipts,” Dr. Yusuf stated. The Centre urged the government to concentrate enforcement on large corporations and high-net-worth individuals to secure revenue without destabilizing the livelihoods of the masses.