How Business Owners Can Run Their Business Under Nigeria’s New Tax Policy (Starting January 2026)

From January 2026, Nigeria will begin using a new tax system.This change is meant to make taxes simpler, more digital and fairer especially for small business owners. Many business owners are worried but the truth is, if you prepare early and understand the basics, this new tax policy can actually work in your favor.

Let’s break it down for easy understanding.

First, Know the Size of Your Business
Under the new tax policy, businesses are grouped into small and large businesses. If your business is considered small (based on your yearly sales and assets) you may:

• Pay little or no company income tax
• Enjoy fewer tax demands

This is good news for many SMEs. Review your annual sales and assets so you know where your business stands.

Keeping Records Is No Longer Optional
One major focus of the new tax system is proper record-keeping. This means:

• Tracking your sales
• Recording your expenses
• Keeping staff salary records
• Saving invoices and receipts

The government is moving away from estimates and guesswork. Use an inventory management software, Excel sheet, or simple accounting software, whatever works for you. Just make sure your records are clear and accurate.

Taxes Are Going Digital, Prepare Early
From 2026, many tax processes will be done online.This includes:

• Digital invoices
• Online tax filing
• Electronic payment systems

Businesses that are not prepared may struggle. Start using basic digital tools now. Even a simple invoicing app or spreadsheet is a good place to start.

Payroll and Staff Taxes Will Be Clearer
The new tax policy also affects how staff salaries are taxed. Lower-income earners may pay less or be fully exempt. Salary deductions will follow clearer rules. This helps both employers and employees. Review how you calculate staff salaries and deductions to ensure they align with the new system.

Small Businesses Will Get More Breathing Space
The government’s aim is not to shut down small businesses but to support growth. Under the new system:

• Multiple taxes are being reduced
• Small businesses get more exemptions
• Compliance is simpler

But these benefits apply mainly to registered businesses. What you should do: Ensure your business is properly registered so you can enjoy these advantages. Register Your Business and Get a TIN to operate smoothly under the new tax system, your business must be properly documented. You will need:

• Business registration
• A Tax Identification Number (TIN)

Don’t Wait Until 2026 to Prepare Many business owners get into trouble because they wait until enforcement begins. Preparation is key, start now by:

• Organizing your financial records
• Learning basic tax responsibilities
• Consulting an accountant if possible

Nigeria’s new tax policy is sending a simple message to business owners: Keep clean records, go digital and know your business size and you will be fine. With early preparation, this new tax system can help you run your business more confidently and sustainably.

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