From January 2026, a new tax regime will start in Nigeria, a new developmental project will increased and many Nigerians will begin to wonder where the resources are coming from.
What's the new tax law all about?
Many local, state, and federal taxes will be abolished
All local, state, and federal taxes will be harmonised
The new tax now will be divided into two: PIT and CIT
Personal Income Tax (PIT) will be charged on individual accounts irrespective of any banks you're using even if you're using Opay, PalmPay, MoniePoint, Kuda, etc
...and
Company Income Tax (CIT) will be charged on a company account through a corporate bank account, but this will also be clarified further because we've two types of corporate bank accounts.
Now let's move on...
On PIT, if you're earning less than 800,000 annually, you'll be exempted from paying tax but if you earned more, you'll start to pay tax depending on the amount you've in your accounts. It's simple!
How do we escape from this? Please follow me...!
1. You must stop using your personal bank account for all the transactions. If not, you'll be taxed when it's time.
Way forward!
Open a corporate bank account, and this must be with Limited Liability Company and not Business Name/Enterprises and use it for all your transactions, especially for the money who're meant for business.
Let me explain further, if you've a business name or enterprises, please don't use it for your business because it's regarded as a sole proprietorship company and there's no difference between that account and the personal account meaning it'll be taxed like personal accounts.
Do we get that? Follow me!
To register a Limited Liability Company, you can contact us for that, and it'll be done within 5 working days.
Ok! What next?
Apart from registering a Limited Liability Company, you still need a TIN and SCUML certificates and we can also help you to get these done as well.
Now, back to the tax payment!
Before we move on, let me warn everyone of you before it's too late and to avoid unexpected deductions of your money as tax in your personal accounts, please make sure you're guided with this piece and take immediate actions that's needed as fast as possible.
If you've Opay, PalmPay, Kuda, MoniePoint, First Bank, GTBank, Access Bank, Providus Bank, please name the bank, the government will have access to your bank statements through a simple NIN and BVN and this is the reason why you must be more smarter than others.
There's a system that'll showcase the inflows and outflows in your bank accounts in various banks and there's no way you can hide any of your transactions even the one you're sending to your friends and families but there are way out which I've explained above.
How are they going to be taxing the Limited Liability Company corporate account that you've opened?
This is where the good news come in, and only the smartest people will tap this open window to indirectly reduce their tax burden
Let's go...!
If the money in your corporate bank account is less than N50 million, you'll be exempted from paying tax.
Do you hear that?
Let me repeat this, if the inflows and outflows in your limited corporate bank account is less than N50million, you're not expected to pay any tax but if it's more than, you'll be charged based on the extra inflows in the account.
What you're expected to do now!
1. Register a Limited Liability Company now now if you're yet to have one
2. Collect all the other documents needed to open a corporate bank account such as TIN and SCUML certificates, etc.
3. Move the larger part of your money that's in your personal bank accounts into the limited corporate bank account sharp sharp
4. Use your personal bank account for only miscellaneous transactions to reduce the burden on cash inflows and outflows
5. Separate the money used for business from the one you owned personally
6. Read the above steps again and again if possible for you to get it right
Let me remind you all that the major rationale behind this new tax system is for the RICH to be taxed and for the POOR to breathe but if the common man and average Nigerians refused to be smart enough, they may end up been a victim of circumstances which is one of the reason why I came with this layman analysis on the incoming tax law in Nigeria.
May God bless Nigeria!