The Tax Reform Acts have been signed into law, and while the headlines might focus on big corporations, small businesses like yours are not left out.
Whether you’re running a physical store, selling on WhatsApp, or offering services online, these tax changes will touch your business in one way or another — from how you price, how you keep records, to how you manage your cash flow.
Here are 7 key tax changes you need to know about right now — and how they will affect your business moving forward:
1. The New ₦100 Million Turnover Threshold — Bigger Room to Grow
Before now, once your turnover crossed ₦25 million, you entered a higher tax bracket. That threshold has now moved up to ₦100 million.
✅ What this means for you:
If your annual sales are under ₦100 million, you are exempt from Company Income Tax (CIT), Capital Gains Tax (CGT), and the new Development Levy.
It’s a clear relief for many growing businesses — allowing you to reinvest more and worry less about complicated tax filings.
2. A New Development Levy — If You’re Over ₦100 Million
For businesses crossing ₦100 million in annual profits, a 4% Development Levy (reducing to 2% by 2028) now applies.
✅ Why this matters:
If your business is scaling fast, you’ll need to plan for this extra layer of taxation in your pricing, cash flow, and reinvestment strategies.
3. VAT Compliance Will Be Harder to Avoid
While the VAT rate remains 7.5% for now, the big shift is in enforcement. With the Nigeria Tax Administration Act (NTAA) in play, government plans to use electronic invoicing and transaction monitoring to make VAT collection stricter.
✅ What this means for you:
If you’re registered, you’ll need to stay compliant. If you’ve been avoiding VAT, there’s less hiding space ahead.
It’s time to review your VAT filings and decide if voluntary compliance now could save you penalties later.
4. Capital Gains Tax Just Got More Expensive
If you sell assets like land, shares, or even digital assets like crypto, the Capital Gains Tax (CGT) rate has increased from 10% to 30%.
✅ What you need to do:
If your business invests or holds assets, it’s time to speak to a tax consultant before major sales. This change could heavily impact your net profits on asset disposals.
5. A Bigger Push Towards Formalising Your Business
The new Acts introduce simplified tax identification processes, easier registration via Tax Identification Numbers (TIN), and more emphasis on tracking digital businesses.
✅ Why this matters:
If you’re running an informal business — especially on social media or WhatsApp — there’s every reason to formalise now. Registered businesses will find it easier to access loans, grants, and avoid fines.
6. Withholding Tax Adjustments You Must Track
The NTAA now tweaks withholding tax rates and expands coverage, particularly around consulting services, rent, and digital services.
✅ How it touches you:
If you offer services or hire vendors, you may need to withhold tax or track what’s withheld from you more carefully. Mistakes could trigger penalties or messy tax audits.
7. FIRS Is Out — Say Hello to Nigeria Revenue Service (NRS)
The Nigeria Revenue Service (NRS) replaces the old FIRS, with a stronger focus on digital enforcement, streamlined tax processes, and stricter monitoring.
✅ Why this matters for you:
Expect faster audits, digital verification of tax compliance, and reduced loopholes. Small businesses that keep proper books and stay ahead of filings will have a smoother ride.
Final Word: This Is the Time to Get Proactive
These changes aren’t designed to punish businesses — they’re part of Nigeria’s efforts to formalise the economy.
But here’s the truth: the more organised and compliant you are now, the easier it will be to avoid fines, access bigger opportunities, and grow with peace of mind.
If you’ve been winging your tax strategy, this is your sign to fix it. Review your pricing, clean up your records, and if you need help, don’t be afraid to ask for professional advice.
