E-commerce Seller
Tax Calculator
Calculate tax on your online selling income — Instagram shops, Shopify stores, Jumia/Konga merchants, and WhatsApp vendors. Revenue vs profit-based tax logic.
Your E-commerce Income
How Online Sellers Are Taxed in Nigeria
E-commerce sellers are taxed on profit, not revenue. You deduct the cost of goods sold (what you paid for stock) and operating expenses (delivery, ads, packaging) from your total sales. Only the resulting net profit is subject to personal income tax.
Cost of Goods Sold
COGS includes everything you spend to acquire or produce the goods you sell: wholesale purchase prices, import costs, customs duties, shipping to your warehouse, and raw materials. This is your biggest deduction and directly reduces your taxable profit.
Operating Expenses
Deductible operating expenses include: delivery/logistics fees, Instagram/Facebook ad spend, packaging materials, data and airtime, warehouse or shop rent, staff salaries, platform fees (Jumia, Konga commissions), and website hosting costs.
Frequently Asked Questions
You are taxed on profit only. Deduct cost of goods sold and operating expenses from your total revenue. The remaining profit is your taxable income, subject to the PAYE bands.
Only if your annual turnover (total sales, not profit) exceeds ₦25 million. Below that, VAT registration is optional. If you do register, you charge 7.5% on sales and can reclaim input VAT on purchases.
Yes. All advertising and marketing expenses are deductible business costs, including social media ads, influencer payments, Google Ads, and sponsored posts.
Fully deductible. Delivery charges, packaging materials, and logistics platform fees are all legitimate business expenses that reduce your taxable profit.
Jumia and similar platforms may share merchant data with tax authorities. It is better to register voluntarily and file returns than to be discovered through third-party reporting.
Not legally required, but highly recommended. A separate business account makes it much easier to track income, expenses, and prepare your tax return.
Keep all purchase invoices, sales records, delivery receipts, ad spending records, and bank statements. Digital records are acceptable. Maintain records for at least 6 years.
Yes, if given for genuine business promotion purposes. Product samples, giveaway items, and promotional stock are deductible marketing expenses.
Annual tax is calculated on full-year profit. Monthly losses offset monthly gains. If your annual net result is a loss, you can carry it forward for up to 4 years.
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