The Kano State government has announced a decisive shift in its revenue collection strategy, declaring a ban on all cash and cheque payments for taxes effective from January 1, 2026. This policy is a core component of a broader initiative to modernise tax administration, enhance transparency, and significantly reduce financial leakages within the state's revenue system.
Driving the Digital Shift in Revenue Collection
The landmark decision was formally disclosed by Mr. Muhammad Abba Aliyu, the Executive Director of Compliance and Enforcement at the Kano State Internal Revenue Service (KIRS). He made the announcement during a seminar organised by the Kano Chamber of Commerce, Mines, Industries and Agriculture (KACCIMA). The event, themed “Navigating Nigeria’s New Tax Era: Strategies for Compliance, Profit Protection and Sustainable Business Growth,” focused on the implications of the country's recently enacted tax reform laws.
Aliyu explained that the move was motivated by the impressive results observed from pilot technology deployments in revenue collection. He cited a compelling example where a state agency witnessed its revenue surge from N50 million to N500 million after adopting digital tools. This tenfold increase served as a powerful catalyst for the state-wide policy to eliminate physical payment methods entirely.
New Tax Framework and National Structural Changes
The Kano policy aligns with sweeping structural changes at the national level. Aliyu reiterated that the new Nigerian Tax Act (NTA) establishes the Nigerian Revenue Service, which will replace the Federal Inland Revenue Service (FIRS). This consolidated body will be responsible for collecting taxes on behalf of federal, state, and local governments, aiming to create a more unified and efficient system.
Furthermore, the new Act redefines taxable entities. According to the KIRS director, under the NTA, individuals or businesses with a gross turnover of N100 million and fixed assets valued at N250 million fall into the taxable income bracket. For corporate entities, 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 now classified as small-scale businesses.
Expert Calls for Public Trust and Compliance
Speaking at the same forum, a prominent tax expert, Professor Kabiru Isa Dandago, emphasised the critical role of taxation in national development. He outlined its importance in funding public infrastructure, reducing income inequality, and stabilising the overall economy. Professor Dandago acknowledged that a lack of public trust has historically fostered negative perceptions towards taxation in Nigeria.
He urged citizens and businesses to embrace the new reforms, arguing that the economic success of developed nations is often built on effective and transparent tax systems. He added that beyond revenue generation, taxes are also instrumental policy tools for managing inflation and influencing economic behaviour among consumers and producers.
Despite the critical nature of the discussions, the President of KACCIMA, Ambassador Usman Hassan Darma, represented by Mr. Hassan Yau, expressed disappointment at the low turnout of business owners at the seminar. He described the poor attendance as regrettable, given the direct impact of tax policies on the commercial community.
The implementation of the new national tax laws, scheduled for the same January 2026 start date, has not been without controversy. Some lawmakers and the Nigerian Bar Association have raised allegations of discrepancies between the versions of the laws passed by the National Assembly and the gazetted copies, calling for a suspension pending resolution. However, Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, has publicly dismissed these claims, asserting the documents are consistent.
