Small business accounting in Nigeria: a plain guide (2026)
What records to keep, which taxes apply at your size, the deadlines that matter, and the mistakes that cost Nigerian small businesses money.
Last checked . This is general information, not tax advice for your own business.
Most Nigerian small businesses do not fail because the books were wrong. They run into trouble because nobody could say, at the end of a good month, whether the money in the account was profit or somebody else's.
Keeping books properly is how you tell the difference. Here is what that actually involves at a small business's size, without the jargon.
What you are legally required to keep
Whatever your size, you need records of what came in, what went out, and what you still owe or are owed. In practice that means five things:
- Sales invoices you issued, numbered in order and not skipping any
- Purchase invoices and receipts from your suppliers
- Bank statements for every account the business uses
- Payroll records if you have staff, including PAYE deducted
- A record of money the business owes and is owed
Keep them for at least six years. The tax office can go back, and the burden of proving a figure is yours, not theirs.
Which taxes apply at your size
This is where the 2026 rules changed things in small businesses' favour. The thresholds now are:
| Applies when | |
|---|---|
| Company income tax | Turnover above ₦100 million, or fixed assets above ₦250 million |
| VAT | Turnover of ₦50 million or more |
| Withholding tax | Always, on payments you make to suppliers |
| PAYE | Always, if you pay salaries |
A company under ₦100 million in turnover with fixed assets under ₦250 million is exempt from company income tax, capital gains tax and the development levy. That line was ₦25 million before January 2026, so a lot of businesses that used to pay now do not.
Being exempt from a tax is not the same as being exempt from filing. You still register, you still have a TIN, and you still file your annual return. Businesses get fined for not filing far more often than for not paying.
The deadlines that catch people
| What | When |
|---|---|
| VAT return and payment | 21st of the following month |
| Withholding tax, to the federal service | 21st of the following month |
| Withholding tax, to a state service | 30th of the following month |
| PAYE remittance | 10th of the following month |
| Annual company income tax return | Six months after your year end |
The monthly ones are the dangerous ones, because they come round twelve times a year and the penalties stack each month you miss. Our guides to VAT returns and withholding tax go through each in detail.
Separate the business from yourself
This is the single most useful thing a small Nigerian business can do, and it costs nothing.
Open a bank account in the business's name and use only that account for the business. Not your personal account. Not sometimes.
Everything else gets easier once you do: your bank statement becomes your record, your profit figure means something, your accountant's bill goes down because they are not unpicking which transfers were yours and which were the company's, and if the tax office ever asks, you have an answer.
When you take money out, record it as what it is: salary, or drawings, or a dividend. Each is taxed differently and "I just transferred it" is not one of the options.
The five mistakes that cost the most
Treating VAT as income. The 7.5% you added is not yours. If you spend it, you will be short on the 21st, and the penalties for not remitting are worse than for not filing.
Forgetting to deduct withholding tax. If you should have deducted it from a supplier and did not, the tax office comes to you for it. You can rarely get it back from the supplier months later.
Not collecting TINs. You need a supplier's TIN to claim input VAT on their invoice, and without one the WHT rate you must deduct is doubled. Collect it before you pay, not after.
Paying from the wrong account. Once business and personal money mix, nobody can produce a believable set of accounts, including you.
Leaving it all to year end. Reconstructing twelve months of records in January is how a small business ends up with an accountant's bill larger than the tax it owed.
How much bookkeeping do you actually need?
More than a notebook, less than a finance department.
At a minimum, every week: record the invoices you issued, record the bills and receipts that came in, and match your bank account against your records. An hour a week, done consistently, beats three days in a panic.
What makes that hour short is having everything in one place. If invoices are in a notebook, receipts in a bag and payments only on the bank statement, each week starts with assembling the pieces. If they go in as they happen, the week's work is mostly reading.
When to get an accountant
Sooner than most people do, but not for the data entry.
Use an accountant for the things that need judgement: your year-end return, a tax question, whether you have crossed a threshold, how to take money out of the business. Do not pay one to type in your invoices — that is the expensive way to buy bookkeeping, and they would rather you did not either.
What they want from you is a clean set of records they can work from. Give them that and their bill is for advice rather than for archaeology.
Where software fits
What an accounting package is actually for is making the weekly hour short and the year end boring.
MyBooks does that for Nigerian businesses specifically: VAT at 7.5% on invoices and bills, withholding tax taken off supplier payments and grouped by authority, your monthly VAT return laid out as NRS Form 002, and reports your accountant can open for themselves. Prices in naira, and it works in your phone's browser.
This guide is general information, not tax or legal advice for your own business. Thresholds, rates and deadlines change. Confirm anything you are going to act on with the Nigeria Revenue Service, your state's revenue service or your accountant, and check the date at the top of this page to see when it was last reviewed.