Small Business
Tax Calculator
Calculate your small business tax obligations — whether you operate as a sole proprietor, partnership, or registered company. Covers turnover thresholds, CIT exemption, and the Development Levy.
Business Details
How Small Businesses Are Taxed in Nigeria
Tax treatment depends on your business structure. Sole proprietors and partnerships pay personal income tax (PAYE bands) on their profit. Registered companies (Ltd) pay Company Income Tax at 30% — unless they qualify as a small company (turnover ≤ ₦100M, assets ≤ ₦250M), in which case CIT is 0%.
Sole Proprietor vs Company
Sole proprietors benefit from the ₦800,000 tax-free threshold and lower marginal rates on small profits. However, companies benefit from the small company exemption (zero CIT on profits up to ₦100M turnover). The right structure depends on your turnover and growth plans.
Frequently Asked Questions
It depends on your turnover. If below ₦100M annually, a company can qualify for the small company CIT exemption (0%). Sole proprietors benefit from the ₦800,000 tax-free band. Consult a tax professional to compare both scenarios.
Under NTA 2025, companies with turnover ≤ ₦100M AND total assets ≤ ₦250M pay 0% CIT and 0% Development Levy. This is a significant benefit for qualifying SMEs.
Partnerships file an information return, but each partner is taxed individually on their share of the profit. The partnership itself does not pay income tax.
If your annual turnover exceeds ₦25 million, yes. Below that, VAT registration is optional but may be beneficial if you sell to VAT-registered businesses (they can reclaim input VAT).
Yes. You can incorporate your business at any time through the Corporate Affairs Commission (CAC). Assets can be transferred to the new company, though there may be stamp duty and CGT implications.
Rent, salaries, utilities, transportation, professional fees, insurance, repairs, advertising, and any expense wholly and exclusively incurred for the business. Capital items are claimed through capital allowances.
Sole proprietors file annually by 31 March. Companies file within 6 months of their financial year-end. VAT returns are monthly (by the 21st). PAYE employer returns are monthly (within 10 days).
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