Running a small business in Nigeria today is no small feat — between rising costs, new tax policies, and customers who want everything “urgent,” you can feel squeezed from all angles. But here’s the good news: the Nigerian tax system allows you to reduce your taxable profit through something called “allowable deductions.”
In simple terms, allowable deductions are expenses you can subtract from your income before calculating tax. If you don’t understand them, you may end up paying more tax than necessary. Let’s unpack this in an interactive way.
Running a small business in Nigeria is no small feat. Between rising costs, government policies, and competition, it often feels like you’re juggling ten things at once. But one thing most entrepreneurs overlook—until it becomes a problem—is keeping good records and receipts.
If you’re using your business account (or worse, your personal account) without proper records, you may be exposing yourself to unnecessary taxes, audits, or even penalties. Let’s break this down with practical examples so you see why this matters to your business.
Many small business owners in Nigeria still run their hustle with a personal bank account. It feels easy — customers transfer money, you withdraw, you spend. Done.
But with Nigeria’s new tax policy reforms, this habit could cost you more than you think. Let’s break it down together.
Disclaimer: This post is for general informational purposes. Always consult a qualified tax professional for advice in your specific circumstance.
In June 2025, the President signed into law a comprehensive package of tax reform bills that reorganize, consolidate, and modernize Nigeria’s tax framework.
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