How Presumptive Taxation Simplifies Taxes for Small Businesses

In many countries, small businesses and informal traders are nearly impossible to tax through standard income tax systems. The administrative burden is too high, compliance is low, and governments miss billions in revenue. Enter presumptive taxation: a simplified system that estimates tax liability based on observable indicators like turnover, square footage, or number of employees. In this episode, Lucas and Luna explore how presumptive tax regimes work, using real examples from India's composition scheme (turnover under $1.5 million, flat 1% tax rate) and Ghana's simplified regime for roadside vendors. They discuss the trade-off between efficiency and equity — these systems raise revenue without costly audits, but can be regressive and may discourage businesses from growing. They also touch on recent 2026 reforms in Kenya and Nigeria that expanded presumptive thresholds. A practical look at how tax theory meets the reality of millions of unregistered businesses. #PresumptiveTaxation #SmallBusinessTax #TaxSimplification #InformalEconomy #IndiaCompositionScheme #GhanaTax #KenyaTaxReform2026 #NigeriaTax2026 #TaxCompliance #RevenueMobilization #DevelopingEconomies #Economics #TaxPolicy #FexingoBusiness #BusinessPodcast #LucasAndLuna #FlatTax #TurnoverTax Keep every episode free: buymeacoffee.com/fexingo