As the Federal Government begins implementing Nigeria’s new tax law, concerns and confusion have spread among business owners and individuals.

However, business analyst Mr Peter Sunday and a member of the Institute of Chartered Accountant of Nigeria has offered clarity, urging Nigerians not to panic but to understand how the law applies to them.

Speaking during a tax briefing, Mr Sunday explained that businesses with an annual turnover of less than ₦50 million are exempt from paying company income tax.

He stressed that turnover refers to total yearly sales, not profit. “If your total sales for the year are not up to ₦50 million, you will not pay tax,” he said.

However, he added that such businesses are still required to file a self-assessment tax return to formally declare zero tax liability, describing this as a civic responsibility.

Mr Sunday further explained that businesses earning below ₦50 million may still be taxed if they use business assets valued at ₦250 million or more, noting that asset value is a key consideration under the new law.

For registered companies, he clarified that limited liability companies with turnovers below ₦100 million will also pay zero tax, provided they comply with filing requirements.

Addressing widespread fear among business owners, Mr Sunday warned against using business accounts for personal transactions. He said that large personal inflows—such as ₦200 million sent from abroad into a business account—could attract tax, as government monitoring systems would treat it as business income.

According to him, the government tracks financial activity through Bank Verification Numbers (BVN) and National Identification Numbers (NIN), making it essential for businesses to carry out proper self-assessment.

He cautioned that failure to file a self-assessment tax returns could lead the government to issue a Best of Judgment (BOJ) assessment, where tax authorities estimate a business’s income and impose a potentially high tax bill.

“If a business owner believes the BOJ assessment is excessive or inaccurate, they can challenge it by submitting proper books of account,” he said.

Mr Sunday explained that once expenses are verified, the government will tax the Profit Before Tax (PBT). He noted that companies with a PBT of ₦300 million would be required to pay 30 per cent tax on that profit.

He also downplayed concerns over the Tax Identification Number (TIN), stating that BVN now captures most taxpayer data, making compliance more streamlined.

Mr Sunday concluded by advising business owners to maintain proper financial records, saying accurate bookkeeping protects them from excessive tax estimates and ensures they only pay what is legally due.

For consultation, and more clarification, reach out for a token via +234 703 009 0994 to avoid unnecessary agitation or palpitations regarding financial issues and new tax regulation.