Nigerian State Bans Tax Payments with Cash, Cheque From January 2026, Gives Reasons
- A Nigerian state has banned cash and cheque payments for taxes starting January 1, 2026
- The policy is aimed at reducing revenue leakages and improving transparency
- Experts urged Nigerians to embrace taxation as a tool for economic growth
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
The Kano state government has announced a ban on the payment of taxes using cash or cheques, with the policy set to take effect from January 1, 2026, as part of efforts to curb revenue leakages and improve tax administration in the state, Daily Trust reported.
Source: Getty Images
The decision was disclosed by the Executive Director of Compliance and Enforcement at the Kano State Internal Revenue Service (KIRS), Mr Muhammad Abba Aliyu, during a seminar organised by the Kano Chamber of Commerce, Mines, Industries and Agriculture (KACCIMA).
The event focused on Nigeria’s new tax reform laws under the theme: “Navigating Nigeria’s New Tax Era: Strategies for Compliance, Profit Protection and Sustainable Business Growth.”
Why Kano state bans cash tax payments
Aliyu said the move followed positive results recorded after the deployment of technology in revenue collection.
According to him, one state agency saw its revenue rise from N50 million to N500 million after adopting digital tools, prompting the decision to eliminate cash and cheque payments.
He reiterated that the new tax framework also introduces structural changes at the national level, noting that the Nigerian Revenue Service will replace the Federal Inland Revenue Service (FIRS).
The new body will be responsible for collecting taxes on behalf of the federal, state and local governments.
Kano govt explains taxable individuals, businesses
Aliyu added that under the Nigerian Tax Act (NTA), individuals or businesses with a gross turnover of N100 million and fixed assets valued at N250 million fall within the taxable income bracket.
He said companies registered under the Companies and Allied Matters Act (CAMA) with a gross income of N50 million and fixed assets not exceeding N250 million are classified as small-scale businesses.
Speaking at the seminar, a tax expert, Professor Kabiru Isa Dandago, said taxation plays a key role in funding infrastructure, reducing income inequality and stabilising the economy.
He noted that a lack of public trust has contributed to negative perceptions of taxation in Nigeria.
Professor Dandago urged Nigerians to embrace the new tax reforms, arguing that tax-based economies in developed countries thrive due to effective and transparent tax systems.
He added that taxes are also used to manage inflation and influence the behaviour of consumers, traders and service providers.
Source: Getty Images
Meanwhile, the President of KACCIMA, Ambassador Usman Hassan Darma, who was represented by Mr Hassan Yau, expressed concern over the low turnout of business owners at the seminar, describing it as disappointing given the importance of tax policies to the business community.
New tax law stirs controversy
Legit.ng earlier reported that the new tax laws, which are expected to go into effect on January 1, 2026, may be suspended as lawmakers and politicians alleged discrepancies in the passed laws and gazetted versions.
Recall that even the Nigerian Bar Association also joined lawmakers in calling for the suspension of the implementation of the tax laws, pending the resolution of all grey areas.
Meanwhile, Taiwo Oyedele, chairman of the Presidential Fiscal Policy and Tax Reforms Committee, has dismissed claims of discrepancies between the tax reform bills passed by the National Assembly and the versions subsequently gazetted.
Source: Legit.ng
