Manny Ita –
Financial analysts and tax consultants have issued a series of urgent recommendations for small business owners and individual taxpayers following the full implementation of the Nigeria Tax Act 2025 on January 1, 2026. While the legislative reforms—including the Nigeria Tax Administration Act—aim to simplify the fiscal system and broaden the tax base, widespread confusion persists regarding the new thresholds for “small company” status, which are now widely reported to be between ₦50 million and ₦100 million in annual turnover. Financial educator Kalu Aja has warned that while the reforms offer significant reliefs, including exemptions from Companies Income Tax (CIT) and Capital Gains Tax (CGT) for qualifying entities, business owners must not remain complacent. He emphasized that even exempt taxpayers often must file annual returns to maintain a clean compliance certificate, noting that “filing declares your position officially, avoids automatic penalties for non-filing, and unlocks benefits like proofs for loans, contracts, or travel.”
To navigate the transition from the old Companies Income Tax Act, experts are advising entrepreneurs to prioritize impeccable, digitized record-keeping and to immediately seek professional guidance. Business owners are being encouraged to pool resources with trade associations or cooperatives to hire consultants if individual fees are prohibitive, as professional advice is often tax-deductible and significantly less expensive than future penalties. “Seek expert advice immediately, don’t go it alone,” Aja advised, stressing that “professional advice is often tax-deductible where applicable, and it’s far cheaper than penalties later.” Furthermore, the new regime emphasizes a shift away from cash-heavy operations toward traceable digital trails through bank transfers and mobile money platforms to simplify audits and expense verification.
The current regulatory environment increasingly favors transparency, with experts suggesting the retention of affordable bookkeepers or accounting students to conduct monthly reviews of transactions. Analysts maintain that the reforms are designed to support genuine small operators, provided they embrace formal structures rather than evade them. “Don’t rely solely on ‘I earn below ₦800,000 as an individual’ or ‘my business turnover is under ₦100m, so no tax,'” Aja cautioned, reiterating that the goal of the 2025 reforms is sustainability through voluntary compliance. By shifting to digital invoicing and maintaining secure cloud-based folders for receipts, small businesses are expected to position themselves ahead of any upcoming enforcement ramps by the federal tax authorities
