Feature/OPED
The Complete Guide to Tax Preparation for Small Businesses in Nigeria (2026 Edition)
Let’s be honest… tax preparation in Nigeria can feel like navigating a maze blindfolded. If you’re a small business owner, you’ve probably spent sleepless nights wondering if you’re doing everything right, or worse, overpaying just to stay on the safe side.
The truth is, tax preparation for small businesses in Nigeria doesn’t have to be this complicated. Whether you’re filing for the first time or you’ve been doing it for years, understanding the system, knowing what tools are available, and getting your processes right can save you time, money, and a whole lot of stress.
With Nigeria’s 2025 Tax Reform Acts coming into full effect by January 2026, this is the time to get your house in order. From how to file your company tax to calculating VAT and using technology to automate compliance, this guide walks you through everything you need to know as a Nigerian SME owner.
Understanding the Nigerian Tax Landscape (for SMEs)
Here’s the thing about taxes in Nigeria: the system wasn’t exactly designed with small businesses in mind. At least, that’s how it’s felt for a long time. But the new tax reforms are changing things—finally tilting the table a bit in favor of small and growing businesses.
The Main Taxes Your Small Business Needs to Know About
Company Income Tax (CIT)
This is the big one. Tax on your business profits, collected by the Federal Inland Revenue Service (FIRS).
Under the new tax classification:
- Small companies (turnover up to ₦100 million) are exempt from CIT.
- Medium companies (₦100 million to ₦500 million turnover) pay 20%.
- Large companies (above ₦500 million) pay the full 30%.
This 3-tier structure replaces the older “simplified tax regime” that was capped at ₦25 million. It’s more inclusive, giving more Nigerian SMEs breathing room.
Value Added Tax (VAT)Currently 7.5%, and yes, you’re required to collect it from your customers and remit it to FIRS. VAT applies to most goods and services, except for specific exempt categories (we’ll get into that shortly).
Withholding Tax (WHT)A portion deducted at source from payments like contracts, rent, or professional services. You or your clients remit this to FIRS, and it counts as advance tax credit.
Personal Income Tax (PAYE)If you have employees, you’re responsible for deducting PAYE monthly. Rates are progressive, up to 24%, but the new reform gives relief to low-income earners—anyone earning under ₦800,000 annually is exempt.
Development Levy (New)This is one of the new elements of the 2025 reform. Medium and large companies will now pay a 4% Development Levy on assessable profits. It replaces a mix of older levies like the Education Tax, IT Levy, and NASENI Levy, consolidating them into one cleaner charge.
Common Compliance Challenges
Even with all these changes, the real struggle for many Nigerian SMEs isn’t the tax rates—it’s compliance.
Here’s what still trips people up:
- Poor record-keeping that leads to inaccurate filings
- Missing legitimate deductions and allowances
- Navigating both FIRS and state tax authorities
- Keeping up with policy updates and new forms
- Losing productive time trying to manually reconcile tax data
If that list feels familiar, you’re not alone.
How to File Company Tax in Nigeria
Alright, let’s get practical. How do you actually file company tax in Nigeria?
Step 1: Get Your Tax Identification Number (TIN)
If you don’t already have one, start here. Your TIN is your business’s fingerprint in the tax system. You’ll need it for every transaction with FIRS.
You can register online via the FIRS website or walk into a local tax office. Required documents include:
- Certificate of Incorporation
- Memorandum and Articles of Association
- Valid IDs of company directors
- Proof of business address
Step 2: Keep Proper Financial Records
This one’s non-negotiable. Tossing receipts in a drawer isn’t record-keeping. You need:
- Income statement
- Balance sheet
- Cash flow statement
- Supporting documents (receipts, invoices, bank statements)
Many businesses now use accounting software to make this easier. Tools like TaxAnchor360 are built for Nigerian tax laws, automating calculations and record management.
Step 3: Prepare Your Tax Returns
Once your books are tidy, it’s time to compute your taxable income. You’ll need:
- Self-Assessment Form (for CIT)
- Audited Financial Statements (for turnover above ₦100 million)
- Computation of Tax Liability
- Evidence of any previous payments
Step 4: File Your Returns
You can do this manually at FIRS offices (brace yourself for long queues) or the smarter way e-filing.
Nigeria’s Integrated Tax Administration System (ITAS) lets you submit returns, upload documents, and track your filing status online. It’s faster, cleaner, and saves you at least a day of back-and-forth.
Step 5: Pay Your Taxes
Once you get your assessment notice, pay promptly via:
- Bank transfer to designated FIRS accounts
- Online payment on the FIRS portal
- Authorized remittance platforms
Keep proof of every payment—receipts, screenshots, bank alerts. They’re your best friend if FIRS ever comes knocking.
Important Deadlines You Can’t Miss
- CIT filing: Within 6 months after your financial year ends
- PAYE remittance: By the 10th of the following month
- VAT filing: Monthly, by the 21st of the following month
- WHT remittance: Within 21 days after deduction
Miss these and you’re looking at penalties—₦25,000 for the first month and ₦5,000 for each subsequent month, plus interest.
Why Small Businesses Overpay Taxes
Let’s talk about something painful.
Many Nigerian SMEs overpay taxes—not because they’re trying to be saints, but because they don’t know better.
Common mistakes include:
- Not claiming allowable deductions. Expenses like staff training, utilities, R&D, and depreciation are often ignored.
- Poor documentation. If you can’t prove an expense, FIRS won’t recognize it.
- Ignoring capital allowances. These can dramatically reduce your taxable income.
- Not applying small-company exemptions. Paying 30% CIT when you qualify for 0% is like throwing money away.
The solution isn’t to overpay “just to be safe.” It’s to stay informed and use tools that calculate accurately.
- E-filing integration. Submit directly to FIRS from within the platform.
- Smart record-keeping. Auto-store receipts, invoices, and proof of payments.Tax Preparation Tools for Small Businesses
Handling tax manually in 2025 is like using a typewriter when everyone else is on laptops.
Why You Need Tax Software
Every hour spent tinkering with spreadsheets is time you could spend growing your business. Beyond saving time, good tax software offers:
- Accuracy – Fewer errors, cleaner records
- Compliance – Automatically updated for new reforms
- Documentation – Digital trail for audits
- Insights – Real-time visibility into your tax position
What to Look For
- Local compliance. The software must handle Nigerian-specific taxes—CIT, VAT, PAYE, WHT—and integrate with FIRS.
- Automated calculations. No manual math.
The Best Options for Nigerian SMEs
TaxAnchor360 stands out as a Nigerian-built, AI-powered tax compliance tool designed specifically for local businesses. It automates CIT, VAT, and PAYE calculations, connects with FIRS for direct filing, and flags potential errors before they become penalties.
You could use global platforms like QuickBooks or Xero for accounting, but they often miss Nigerian-specific compliance features. That’s why a localized solution like TaxAnchor360 makes more sense for SMEs here.
How to Calculate VAT in Nigeria (with Example)
VAT tends to confuse people, but it’s simpler than it looks once you understand the logic.
What’s VAT?
Value Added Tax is a consumption tax. You collect it from your customers on behalf of FIRS.
Current rate: 7.5%
Threshold: Businesses with turnover above ₦25 million must register for VAT.
What’s Taxable and What’s Not
VAT applies to:
- Most goods and services
- Imported goods
- Digital services
VAT-exempt items include:
- Basic food items
- Educational materials
- Medical and pharmaceutical products
- Agricultural products and equipment
- Export goods and services
Example Calculation
Let’s say you invoice a client ₦500,000 for consulting.
- VAT = 7.5% of ₦500,000 = ₦37,500
- Total invoice = ₦537,500
If you also bought office equipment for ₦100,000 + ₦7,500 VAT, you can deduct that ₦7,500 input VAT from your ₦37,500 collected.
Your net VAT payable is ₦30,000.
Practical Example: Retail
Sales: ₦2,000,000
Output VAT: ₦150,000
Purchases VAT: ₦93,750
Net VAT Payable: ₦56,250
That ₦56,250 is due by the 21st of the following month.
Common VAT mistakes to avoid:
- Not registering for VAT when required
- Charging VAT on exempt items
- Missing filing deadlines
- Keeping incomplete VAT registers
How Software Helps
Modern tax tools like TaxAnchor360 automatically track your VAT, match input and output transactions, generate reports in FIRS-approved format, and remind you before deadlines.
The Rise of AI and Automation in Tax Compliance
Something big is happening in tax compliance, and AI is right at the center of it.
Traditional tax software is reactive. It waits for you to enter numbers. AI-powered tools actually think about your situation.
Here’s how AI changes the game:
- Predictive compliance: Flags potential errors before filing.
- Intelligent deduction recognition: Identifies deductions you might miss.
- Real-time updates: Automatically adjusts to new tax laws.
- Natural language queries: You can literally ask, “What’s my estimated tax if I hire two new staff?” and get an answer.
Real-world impact:
A Lagos-based logistics company reduced overpayment by 12% after switching to AI-powered tax automation. The system spotted misclassified transactions and unclaimed deductions. Savings in the first year? Over ₦600,000.
Modern tax automation features include:
- Continuous transaction monitoring
- Smart document management (just snap a receipt)
- Real-time tax dashboards
- Multi-tax integration (CIT, VAT, PAYE, WHT)
- Predictive cash flow analysis for tax planning
If you’re spending hours every month juggling tax tasks, or you’re unsure of your current compliance status, AI automation is your next step.
TaxAnchor360 uses AI to categorize transactions, track rule changes, and generate audit-ready reports automatically. Built for Nigerian businesses, it understands our tax environment down to the last form.
Ready to simplify your tax filing? Try TaxAnchor360 — Nigeria’s AI-powered tax compliance tool.
Conclusion: Taking Control of Your Tax Compliance in 2025
Let’s face it. You didn’t start a business to spend nights staring at spreadsheets. But tax compliance isn’t optional, and getting it wrong can cost you dearly.
The good news? It’s 2025, and things are changing. Online filing actually works. AI-powered compliance tools exist. And the 2025 Tax Reform Acts make life a little easier for small business owners—if you know how to use them.
Your Action Plan
- Get organized.
Keep your financial records clean and up to date. Every transaction matters. - Understand your obligations.
Learn what taxes apply, when they’re due, and what reliefs you qualify for. - Use the right tools.
Whether it’s TaxAnchor360 or another trusted platform, automation is your best ally for accuracy and peace of mind.
The Nigerian tax landscape isn’t getting simpler, but the tools to handle it? They’re getting smarter every day.
You’ve got this. And if you need help, that’s why TaxAnchor360 exists—to help Nigerian business owners simplify taxes, stay compliant, and avoid costly mistakes.
Save hours on tax preparation and compliance. Automate with TaxAnchor360. Your future self will thank you.
Demilade Tiwo is an SEO Strategist at TaxAnchor360
Feature/OPED
Taxation Without Representation
By Dr Austin Orette
The grandiosity of Nigerians when they discuss events and situations can be very funny. If the leaders use this kind of creativity in proffering solutions, we may be able to solve some of the problems that plague Nigeria perennially.
There seems to be a sublime affectation for new lingos when the system is being set to punish Nigerians. It is a kind of Orwellian speak.
Recently, there was no electricity throughout the country. The usual culprit and government spoke; people came out to tell us the power failure was due to the collapse of the National grid. Does it really matter what is collapsing? This is just an attempt by some government bureaucrats to sound intelligent.
Intelligence is becoming a borrowed commodity from the IMF or World Bank. What does it mean when you tell Nigerians that the national grid collapsed? Is that supposed to be a reassurance, or it is said to give the assurance that they know something about the anemic electricity, and we should get used to the darkness. This is a language that is vague and beckons the consumer to stop complaining. Does that statement mean anything to Nigerians who pay bills and don’t see the electricity they paid for? If they see it, it comes with an irregular voltage that destroys their newly purchased appliances. Just tell or stay quiet like in the past.
Telling us that a grid collapse is a lie. We have no national grid. Do these people know how silly their language sounds? Nigeria produces less than 10,000 megawatts of electricity for a population of 200 million people. How do you permutate this to give constant electricity to 200 million people? It is an insult to call this low output a national grid. What is so national about using a generator to supply electricity to 200 million people? It is simple mathematics. If you calculate this to the minute, it should not surprise you that every Nigerian will receive electricity for the duration of the blink of an eye. They are paying for total darkness, and someone is telling them they have an electricity grid.
If you can call the 10,000-megawatt national grid collapsed, it means you don’t have the mind set to solve the electricity problem in Nigeria.
To put it in perspective is to understand the basic fact that the electrical output of Nigeria is pre-industrial. Without acknowledging this fact, we will never find solutions as every mediocre will come and confuse Nigeria with lingos that make them sound important.
It is very shameful for those in the know to always use grandiose language to obfuscate the real issues.
South Africa with a population of sixty million produces about 200,000 megawatts of electricity daily. Nigeria produces less than 10,000 megawatts. Why South Africa makes it easy to lift the poor from poverty, Nigeria is trying to tax the poor into poverty.
The architects of the new tax plan saw the poor as rich because they could afford a generator.
A non-existent subsidy was removed, and the price of fuel went through the roof. Now the government says they are rich. What will they get in return for this tax extraction? Why do successive Nigerian governments always think the best way to develop Nigeria is to slap the poor into poverty? What are the avenues for upward mobility when youth corps members are suddenly seen as rich taxpayers? Do these people know how difficult it is to start a business in Nigeria?
After all the rigmarole from Abuja to my village, I cannot get a government certificate without a-shake down from government bureaucrats and area boys. The government that is so unfriendly to business wants to tax my non-existing businesses. Are these people in their right state of mind? Why do they think that taxing the poor is their best revenue plan? A plan like this can only come from a group of people who have no inkling of what Nigerians are going through. People can’t eat and the government is asking them to share their meager rations with potbellied people in Abuja.
Teach the people how to fish, then you can share in their harvest. If an individual does what the government is doing to Nigerians, it will be called robbery, and the individual will be in prison. When the government taxes people, there is a reciprocal exchange. What is being done in Nigeria does not represent fair exchange.
Nigerians have never gotten anything good from their government except individual wealth that is doled out in Abuja for the selected few.
The question is, will Nigerians have a good electricity supply? NO. Will they have security of persons and properties? No. Will they have improved health care? NO. Will there be good roads? No. Will they have good schools and good education? No.
Taxation is not good governance. A policy like this should never be rushed without adequate studies. Once again, our legislators have let us down. They have never shown the people the reason they were elected and to be re-elected. They are not playing their roles as the watchdog and representatives of the people. Anyone who voted for this tax bill deserves to lose their positions as Senators and Members of the House of Representatives.
We are not in a military regime anymore. Nigerians must start learning how to exercise their franchise. This taxation issue must be litigated at the ballot box. The members of the National Assembly have shown by their assent that they don’t represent the people.
In a normal democracy, taxation without representation should never be tolerated. They must be voted out of office. We have a responsibility and duty to use our voting power to fight unjust laws. Taxation without representation is unjust. Those voted into power will never respect the citizens until the citizens learn to punish errant politicians by voting them out of office. This responsibility is sacred and must be exercised with diligence.
Dr Austin Orette writes from Houston, Texas
Feature/OPED
Why GOtv Continues to Shape Nigeria’s Home Entertainment Culture
For many Nigerian families, GOtv has become more than a television service. It is part of the daily routine. It is what people unwind with after a long day, what keeps children entertained on quiet weekend mornings, and what brings households together during football matches, movie nights, and festive celebrations. Over the years, GOtv has blended naturally into these everyday moments, shaping the way Nigerians enjoy entertainment at home.
Here are some of the reasons GOtv continues to stand out.
1. Local Content That Feels Like Home
Nigerians love stories that reflect their lives, and GOtv delivers this consistently. With Africa Magic, ROK, and other local channels, viewers enjoy Nollywood movies, relatable dramas, reality shows, and lifestyle programming that speak their language. These are familiar faces, familiar stories, and familiar experiences. GOtv understands the value of cultural connection and continues to invest in the content viewers care about.
2. Affordable Packages That Work for Real Families
GOtv has built its reputation on affordability. With packages designed for different budgets, families can enjoy quality entertainment without financial pressure. Some of the affordable packages on GOtv include GOtv Jinja, GOtv Jolli, GOtv Max, GOtv Supa, GOtv Supa Plus. This balance of good content at a comfortable price is a major reason GOtv remains a trusted household name across Nigeria.
3. A Channel Lineup That Has Something for Everyone
The beauty of GOtv is its range. Children enjoy their cartoons and animated shows, parents relax with movies and telenovelas, sports lovers stay connected to live games and highlights, and music and lifestyle channels keep the energy lively. Whether it is catching up on the news, finding something light after work, or choosing a family movie for the weekend, GOtv fits naturally into everyday Nigerian life.
4. Programming That Matches Our Daily Rhythm
GOtv understands the way Nigerians watch television. Weeknights come with easy to follow entertainment, weekends offer longer movies and marathons, and festive seasons arrive with special programming that brings everyone together. The schedule is practical, familiar, and aligned with the pace of Nigerian homes.
5. Easy Access Across the Country
From major cities to smaller communities, GOtv remains reliable and easy to use. Installation is straightforward, navigation is simple for both adults and children, and the service works seamlessly across the country. Even when life gets busy, GOtv makes it easy to stay connected, subscribers can pay and reconnect instantly without long processes or penalties, picking up right where they left off.
With relatable content, pocket-friendly pricing, and a channel lineup built around real Nigerian lifestyles, GOtv has earned its place in homes across the country. As the entertainment landscape evolves, GOtv continues to grow with its viewers, shaping how Nigerians watch, share, and enjoy moments together every day.
Feature/OPED
Tegbe Highlights Benefits of Nigerian Tax Reform Acts
Chairman of the National Tax Policy Implementation Committee (NTPIC), Mr Joseph Tegbe, has enumerated the benefits of the Nigerian Tax Reform Acts 2025, stating they mark a significant turning point in the country’s pursuit of a robust and sustainable economy.
In an article published in several national publications, Mr Tegbe said the tax laws were a comprehensive overhaul of the country’s fiscal architecture, aimed at creating a modern, efficient, and transparent tax system that supports economic growth, development, and prosperity for all Nigerians.
The NTPIC chair, who is also the Director-General of the Nigeria-China Strategic Partnership (NCSP), affirmed that the new tax laws are built around four key pillars: reconnecting the economy to the state, standardising and modernising fiscal administration, promoting predictability, and re-balancing the fiscal social contract.
“By broadening the tax net, simplifying rules, and improving administration, we are creating a more predictable fiscal environment that supports businesses and households,” he explained.
He cited global best practices that informed the reforms like South Korea, Singapore, and Rwanda, where tax reforms have driven economic growth and development.
“These countries have shown that with the right policies, institutions, and leadership, it is possible to transform a nation’s economy and improve the lives of its citizens,” he said.
According to him, the tax reform will protect low-income earners and small businesses, with measures such as zero tax rates for those earning up to N800,000 and the expansion of zero-rated VAT items for critical sectors, including healthcare, education, and agriculture.
“By taking away the tax burden on small income earners and small businesses, the reforms aim to preserve livelihoods, encourage formal participation, and allow enterprises to grow organically. We recognise that these sectors are critical to our nation’s development, and we are committed to supporting them,” he noted.
The Acts also emphasise digitalisation and technology-driven tax administration, with the introduction of e-invoicing to improve compliance, transparency, and reduce administrative burdens, a significant step towards modernising the tax system and making it more efficient, he posited.
Consequently, he emphasised that the success of the reform depends on careful implementation, necessitating ongoing engagement with stakeholders to ensure proper understanding.
The implementation of the tax Act is expected to stabilise the fiscal environment, support production, protect critical sectors, and modernise tax administration in line with global standards, adding it will also enhance Nigeria’s ease of doing business, attract foreign investment, and generate employment opportunities.
“We are confident that these reforms will unlock new opportunities for businesses, investors, and entrepreneurs, and contribute to the growth and development of our economy,” he added.
-
Feature/OPED6 years agoDavos was Different this year
-
Travel/Tourism9 years ago
Lagos Seals Western Lodge Hotel In Ikorodu
-
Showbiz3 years agoEstranged Lover Releases Videos of Empress Njamah Bathing
-
Banking8 years agoSort Codes of GTBank Branches in Nigeria
-
Economy3 years agoSubsidy Removal: CNG at N130 Per Litre Cheaper Than Petrol—IPMAN
-
Banking3 years agoFirst Bank Announces Planned Downtime
-
Banking3 years agoSort Codes of UBA Branches in Nigeria
-
Sports3 years agoHighest Paid Nigerian Footballer – How Much Do Nigerian Footballers Earn











