Transcription
[Music] Tonight's meeting has been themed the Nigerian Tax Summit because on the 1st of January 2026, a new tax law will go into effect in our great nation. And as a kingdom church raising kingdom ambassadors, kingdom millionaires and billionaires, we need to position ourselves because we are not just talking to you about paying tithes in millions and hundreds of millions and billions. We're also talking to you about paying tax in millions. So you give on to Caesar. All belongs to Caesar.
So, um, we put together, um, what we call question and answers on the new Nigerian tax law, and I have, uh, some panel of professionals that I've joined in making sure we put this together. I'm just representing them to unfold, and then we'll take your questions tonight. Amen. Hallelujah.
So, question and answers on the Nigerian, on the new Nigerian tax law, specific focus on individuals and small businesses. So, we, we put it together in a Q&A format so that we can just deal with different aspects.
Question one says, when will the new Nigerian tax act take effect? So, when is this starting? It's starting on the 1st of January 2026. So, the new Nigerian tax act goes into effect from what? 1st of January 2026.
Number two, which specific individuals does the tax law apply to? Are there people that this law applies to? Are there people that it does not apply to? Well, the answer is simple. It applies to all individuals that earn income in Nigeria. So, whether you are workers, content creators, remote workers, influencers, traders. A controversial aspect was brought out when they said even Ron's girl will pay tax. No. And they said that is it 6 billion or 600 billion. One ridiculous money that they said that they calculated how much was made in Lagos alone. I think it's 60 something billion or 600 something billion. Very ridiculous. You know, it's amazing. Somebody's patronizing them. So, no matter what you do, as long as you earn money in Nigeria, um, you're going to pay the tax. And then Nigerians earning income abroad if they are tax residents in Nigeria.
So, what this means is this. If you are resident in Nigeria and you make money abroad, so you have properties abroad, you have investments abroad. When your properties or investments abroad, when they bring in money, you will pay the tax of that money in Nigeria. Because you see, you are not paying tax in those countries, but because you are residents in Nigeria, you will now pay that tax. So, that means as you are entering January, don't try to be secretive because they are linking NIN, BVN, everything is going to be linked together. And then they are connecting with the international platform with every commercial NAV center all over the world, and there is now information sharing. So, it's better for you to buy self, go and say, "I have a property in Kenya, I have a property in Swaziland, I have one property in London. This is how much I made." So that, if you don't have an accountant, this is the time for you to get an accountant, a tax consultant. Don't try to be stingy and say, "I'm not paying professional." Pay so that you will not pay.
Number three, will transfers and deposits into my bank account be taxed? You know that there is COOT and bank charges and all those stuff, POS charges. So, you are now saying, "Will transfers and deposits into my bank account be taxed?" No. Moving money around via POS, transfers, deposit, or withdrawal is not a taxable event. What is taxed is income earned. So, that somebody pays into your account now, say, "Okay, I paid money, help me please send this money to this person." It doesn't mean they are going to come and tax you because the money entered your account. Do you understand? It is not an earning, it is a transaction. So, what it means is that you have to now be careful about people saying, "Give me your account, let me transfer this money and send this money to this person." Because at the end of the day, by the time they look at the number of you that are collecting money, you want to boost your account for visa. By the time they now look at the turnover and the money that has gone through your account in the year, they might say they want to come and audit you and confirm whether it is really your money. So, those of you that say, "Me, I'm not an accountant. I don't like mathematics. I don't really like calculation." You have to like calculation now. And this is not the time to be doing cash. This is the time for you to actually have everything done online. Use your ATM so that everything will be there. You'll be able to remember. And when you are sending money to someone or collecting money from someone, this is the time to ensure that it is well. So, you can now say, "Okay, loan to this person," or "Money they say we should share for Papa's burial." You know, those of you that they use your account to collect money. You will now say, "Okay, everybody, brother James is getting married. Let us pay into Sister Caro's account." And you are Sister Caro, and you are paying money into your account for somebody's birthday. You better have the definition, "Birthday, birthday, birthday," so that you will now put it together and you will transfer it.
Number four, will the money I keep in my bank account be taxed from 2026? It means that if I leave money in my account now, will they now come and say, "This person gets money, we collect something?" No. Just having money in your account is not taxable. Only the income you earn, like salary, business profit, or interest, is what can be taxed. So, the question then is, how do we know how the money entered your account? How do we know if it is not a salary or a business? That's why you must have records. So, those of you that don't keep records of income and expenditure and have descriptions of the transactions in your life, you may end up becoming a pawn. Because you know that every time there is a law in Nigeria, there are criminals in government that want to now capitalize on that one to defraud people, to terrorize people, to make life difficult for people. That's why we are telling you all these things now so that you'll be ready. Because many of the government agencies and government parastatals, they don't have any records. Hello.
Number five, I'm a student with no job. Will I pay tax in 2026? Six. No. If you have no taxable income, you will not pay tax. So, what is taxable income? Hello. That is income that you earn that is a profit or a return on investment or a salary. Then it will be taxed.
Will tax authorities now monitor bank accounts of businesses more closely? Yes, they will now monitor you. They are now monitoring spirits. I hope you know that there is what they call skulum. So, now you have to now have that. And what that means is that every transaction in your business that is above, is it 5 million or 10 million, whatever, every week, you have to be sending it to them in the EFCC. Every week is a law. And in your, yeah, in your company, you must have a compliance officer that is representing government. You will use your money to employ your class captain, and you'll be paying the person. So, every company, you must have the skulum, then you must have a, what, a staff that you will be paying salary. You are you going to pay them? You will now introduce the staff to EFCC. Yes. So, if you don't have it, go and set it now. Except you want to remain poor. If you want to operate in hundreds of million, billion, all these things, it's no more negotiable. Then you will now say, "Okay, EFCC, this is the staff I have employed for compliance." Then they will now train that staff. That staff will now go for training with EFCC. Then they will now come, all the directors of the company, they will now train all of you too. Are you see why you have to be here for tax? It's no more business as usual. Oh, that's why we are doing it. So that should not be next week, "Pastor, pray." Oh, pastor, my, we are telling you now. Those of you that are arguing with tithes and offerings, God don't catch you now. Go argue with tax. So, yes, it will be easier for the authorities to track compliance. But again, your bank balance will not be taxed. Profit and income are what will be taxed.
Number seven, will I pay tax on the loan I borrow from fear money or any lender? You know yourself that one that they would now be calling everybody, sending texts to people. No. Loans are not taxable, given that they are not income. However, the interest income earned by fear money will be taxed at their own hands. So, if you go and borrow money now, that money you borrowed, even though it came to you like an income, it is not considered an income because it is a loan. But now, the person giving you the loan, if the person collects interest from you, they will now pay tax on the interest they collected from you. But the question is, how will we know that the money that came to you is a loan? Are you see where record comes in? So, sorry, having two, 2 million, man. Yeah. 2 million. Just send me two. Just, just borrow me 2 million. And then the person now sent 2 million to you and he didn't write "loan" there. He now sent 2 million as discussed. What were we discussing? And then you are now trying to tell them that it's loan. What is the document that backs up the loan? So, if someone is giving you a loan and it is not a statutory or organizational or, uh, loan from any, it's maybe one-on-one. Have a document. It can even be WhatsApp. You print it out, you file it with the date.
Number eight, I run a one-man business. Do I pay personal income tax or company income tax? We're going deeper now. Listen. If registered as an enterprise business name, you will pay personal income tax. If registered as a limited liability company, then you pay company income tax. Now, what's the difference? Now, listen. When you want to register a business in Nigeria, you can go and do what we call registration of business name. When you do registration of business name, it is cheaper. That registration of business name makes you to do business legally with that name. But there are advantages and disadvantages. Now, one of the disadvantages of registration of business name is that that business and you, you are still like the same person. So, that is why you pay personal income tax. If that business gets into trouble, you are in trouble. If that business has liability, the liability is on you. But now, if you do incorporated, register your business as a limited liability company, that company is an entity. You, you are an entity. If that company is owing, you are not owing. Nobody can come and meet you that you are owing them money because it is the company that is owing. So, for that one, you can earn from that company and do pay, or you earn from the company and do personal assessment, but that company will now pay company income tax, not you. And if that company does not make profit, the company will not pay tax. So, if there's no income, there's no tax. So, that's why you have profit before tax, profit after tax. You have gross profit, you have net profit. All these are things that you can now understand if you're a business person.
Now, number nine, if I sell shares and make profit, will I pay tax in 2026? No. As long as the shares you sold are not more than 150 million in value. These are part of the good aspects of it. It's a very good law if you study very well. So, this one now, if you sell all your shares, as long as you have not made 150 million, you are not paying any tax. It's free money. So, you see now, this is why it will be good for you to begin to consider stockbroker now to start buying shares, buying shares, buying shares, because any money you are using to buy shares now, when you are getting your money back, as long as the shares you sold is less than 150 million, is tax-free. And the gain is not above 10 million. You know that the money you sold is 150, no tax. But if they now look at how much did you gain? If the gain you made is not more than 10 million, no tax. But anything above that 10 million, they will tax you. So, that's, however, if it is higher than this threshold, the gain becomes taxable. So, what that means is, if, for instance, now you sold now 150 million, you are not paying taxes. But if inside that 150 million, maybe when you bought the shares, it was 142, and now it's 150, you have only made a profit of 8 million, no tax. But if when you sold it and when you bought it was 110, and now it's 150, you know you have made a profit of 40 million. So, you will now remove 10 million, then the remaining 30, you will now be taxed on it. Do you understand now? So, those are the reasons why you need a tax consultant. So, those of you that are accountants, that are tax professionals, a new market has opened for you. So, go and register yourself, position yourself so that you can become a personal tax consultant. You can become a personal financial advisor. So, a new business is opening up now for people in the financial sector to become tax consultants and financial managers for individuals and for families.
10. I'm a pensioner. Will my pension income be taxed in 2026? No. Approved pension and retirement benefits are exempt from tax. Did you know the use of the word "approved"? Approved pension. So, that is why, you know, we already have the, um, pension, um, fund administrators. So, if you have a pension fund administrator and you went through the process, either as a government staff or as a private staff, and you have a PFA that manages your fund, nothing, nothing will be deducted.
11. Are military salaries taxable? No. The salaries of military officers are now tax exempt. So, if you want to make money now, go and join the military, join the police, join the soldier, join the navy, join, uh, Air Force. So, when you join any, because they want to encourage people that are serving us, to these are the good parts, people that are serving us, risking their life for us. Any money, how much are they really paying them that they will now be taxing them again? So, there is no more tax for every one of them. So, all of you that have these people in your family, more money in their pockets.
Do creatives, authors, musicians, sportsmen still enjoy tax exemption on foreign income? No. They must now pay Nigerian tax on their income earned within Nigeria and outside. Now, this one is for all those social media influencers, creatives that are making noise. "I do $100 million. YouTube is paying me, Facebook is paying me." You better watch your mouth now, because as YouTube is paying you, Nigeria wants to collect their portion. So, before now, if you are an author, like me now, my book is on Amazon, my book is everywhere. So, all of us, we know ourselves. We that are making money in different currencies, we have already prepared ourselves. So, uh, musicians, any money they make outside Nigeria, they don't normally pay tax. So, they have accounts abroad, they keep the money there, come to Nigeria. For now, anywhere you have money, by yourself, by yourself, report yourself.
Are crypto gains taxable? Yes. So, profit from crypto, NFTs, and other digital assets are now taxed. So, don't say, "My own cryptocurrency is a crypto wallet. I'm going to hide the wallet." There is no hiding any wallet, or the wallet to jail.
14. Who is exempt from personal income tax? Individuals earning the national minimum wage or less, and those earning below 800,000 annually are now exempt from tax. So, if the money you are earning every year is less than 800,000, what is the minimum wage in Nigeria now? 70,000. 77. Okay. So, if you are earning minimum wage or less, no tax. 800,000 per annum or less, no tax. So, if you are working in different organizations, you would need to now sit down to look into how to calculate that.
What are the new progressive tax bands? Where is that one now? The new progressive tax band. Okay, it's not showing the middle. Let me go here. Okay. Is there a way you guys can bring it to the middle for me? Let me, so that I can be more legible for me to see. Okay. Thank you. Now, this is the new bracket. Now, so if you earn 0 to 800,000 every year, you will not pay taxes. Do you understand? These are the good parts. Now, another good part, if you earn between 801 to 3 million every year, your tax will be 15%. Why are you doing argue about tithes? Uh-huh. Go and argue about that one. If you are earning 3 million and 1 to 12 million, 1 million per annum, your tax is 18%. If you are earning 12 million and 1 to 25 million per annum, your tax is 21%. If you are earning 25 million and 1 to 50 million, your tax is 23%. If you are earning 50 million and above every year, you are in 25% bracket. So, by the time you are saying, "Oh Lord, give me a portion of the land." That's 25 + 10. So, 35 is gone. You pay government 25, you pay God 10. So, those of you that are arguing with tithes, all these pastors, they have no problem. Face government and go and be arguing, or you choose to remain poor and remain at 800,000 so that you'll just be a poor man, say, "I don't want to pay tax." Are you seeing why you should be ready now? So, you need to have prosperity mind. All these poverty mindsets, they say give, you don't want to give. You must rise above that. Because when you are making billions, 25% will not be anything. 10% will not be. 18. Tell your neighbor, say, "Come out of poverty."
So, 16. If I get a big severance package when leaving my job, will I pay tax on it? You won't pay tax if it is 50 million or less. But if it is more, then the extra amount will be taxed using the progressive tax band in number 15. What does this mean? You work in an oil company, you work in a multinational, you work in a company and you are leaving, and they say, "This one that you are leaving now, want to bless you. This is your package to go." They now bless you with a package. That package they are blessing you with, as long as the package is below 50 million, there is no tax. But if the package is above 50 million, let's say they bless you with 55 million, the 50 million, there's no tax. Then that 5 million on top, you will now go back to that formal scale and check which percentage you will pay. If they bless you with 300 million, you will now remove the 50 million, the remaining 250, you will now pay 25% of that 250. Are you I say, "Yeah." No big gift, they give you.
17. If I earn dividends or rent from abroad, will Nigeria tax it? Listen very well. Dividends, interest, rent, royalty earned from outside Nigeria are exempt from tax, provided they are brought into Nigeria through approved. Hello. Are you seeing this angle now? They want you to bring the money. And guess when you are bringing the money, what's the approved channel? Through the bank, bank to bank transfer. So, you will do it. That will help the exchange rate. It will help foreign income. So, they are encouraging you to repatriate the money back to Nigeria.
Number 18. If a soldier or anyone in the armed forces gets injured in service and starts receiving disability pension, will it be taxed in Nigeria? No. Disability pensions earned by the soldier or anyone in the armed forces will completely be tax exempt.
19. My uncle wants to start an agricultural company next year. Will his company be taxed in Nigeria? No. Agricultural companies, such as those in crop production, livestock, forestry, dairy, cocoa processing, will enjoy a 5-year tax holiday from the day they begin operation. Everybody go to farm. Everybody go to farm. This is one of the best ones. You know, I'm a farmer now. I've launched my palm tree. Ah, I've launched my palm tree business. Ah, so from 2026 to 2031, no tax. I'm into farming now. You never hear, ma, poultry. I'm into pantry now. I'm a farmer now. So, you have to look for how to just go. So, because what they want is everybody, operation, feed the nation. Let's all go into farming to feed our country. So, all of you that are done doing farming, better rush into farming now.
Number 20. Is income from federal or state government bonds taxable? No. All government bonds are exempt from tax. Are you seeing where you should be putting your money? Now, >> so you buy shares, you do bonds, federal bond, state bond, you do farming, real estate, anything farming, real estate, you put your money there. So, these are how you know where to put money. That's how rich people think. They look for the way. And so, immediately I'm going into farming, it's time. That's so by January now, me, I'm launching my farm company. Hello. Now, 21. What does rent relief entail under the new tax law? I'll need this one in the middle again. Rent relief, guys, please help me bring it here. Okay. Please listen. From 2026, individuals can claim rent relief of 20% of the annual rent paid, but capped at 500,000. So, as an individual, when you want to do your taxes, whatever rent you are paying every year, government is now saying 500, out of your rent, you remove it, no tax, which is very good. Some of you. So, if your rent is 500, by the time you remove 500 from your salary and everything, you see how more money will come. Now, for instance, if your yearly rent is 5 million, 20% will be 1 million, but the law caps it at 500,000. To enjoy this relief, you must declare your actual rent and provide the details to the relevant tax authority. So, all of you that are renting houses without agreements, no receipts, they just collect money, collect, just packing. No, make sure everything is documented because the deduction must be proven with documents.
22. I earn 6 million yearly. Will I be better off under the new tax law? So, let's look at this one too and see what happens. So, under the old law, 20% of 6 million is what? 1.2 million plus 200k equals to what? 1.4. Taxable income is now 6 million minus 1.4, becomes 4.6. Applying old tax band gives total tax of 896. Now, new law, let's go to the, is it, is it under the next slide again? Okay, next slide. So, inside the new law, now rent relief is 500, but you must declare the actual rent. Taxable income is 600. 6 million minus 5, becomes 5.5. Applying the new band, your first 800 is zero. Do you understand now? So, you now remove the first 800 again. Your next 2.2 will be at 15%. Then the remaining 2.5 will be at 18%. So, under the new tax law, your tax will now reduce from 8.96 to 780, saving you 116, and this will increase your net take-home. Do you understand? But now, how many of you can do this calculation? That's why wherever you are working now, make sure your office sits down, everybody, account department, you all sit down on how to ensure that every staff of the company is benefiting from this maximally.
23. If my company's turnover is below 50 million, will I pay taxes? No. Small companies under 50 million turnover are exempt from taxes. Hello. So, now, please listen. What does this mean? If your turnover every year is less than 50 million, your company will not pay tax. This is another good one. Your company will not pay tax at all. Zero. All you need is record. And you know that many of you, you are not doing 50 million. But you have to be ready to pay tax because you must do more than 50 million. >> Hello. Now, the other way, listen. No, is now that means you may now have to have plenty companies. No, it's a tax summit. Now, we must, we are yet to tell you. So, that means you can now have four companies. This company for this one. This company for this one. This company for this one. This company for this one. So, that one that all your different things are coming into one account, and there are different things you are doing, is going to put you in trouble. Because some of you now, you are sewing clothes. The same you, you are a KRA. The same you, you are doing Uber. The same you, you are an influencer. Those are four different companies. But because you don't want to have plenty accounts, you are not understanding. You now open one account. Person, Uber money will enter. Fashion money will enter. K money will enter. Mm. So, you will now go and open Josephine Kin. That's one company. Hello. Josephus or Josephine Fashion Limited. No, no, no, no. They are different entities registered with different CAC number, different TIN number. It's a legal thing. It's not illegal. Do you understand? But let me know as we get, how many companies you want to open because of 50 million. If you want to be doing 50 billion, you see that sometimes some of these. So, just get ready for prosperity. Hello.
24. As a remote worker in Nigeria for an international organization, will I pay tax? Please give me, get microphone for my, my panelists. Yes, you will pay tax in Nigeria if the country where the international organization is based exempts your salary under a treaty of diplomatic arrangement. So, if you are working, those of you that work remotely and earn dollars from different countries. Now, because you don't reside in that country, most of you, they pay you your full money without deducting tax. So, if that company you are working for in Germany, in Sweden, in Norway, in Canada, if that company does not deduct tax and they send all the money to you in dollars or naira here, you will pay tax. But if they have already deducted tax, because maybe they have a company policy to say, "Okay, every money that goes," so, then when it comes here, you collect your document from them to prove that they have taxed you, that money will not be taxed.
Finally, will a foreigner earning salary in Nigeria be taxed? No. If their employer is a startup or operates in tech or the creative arts, and their income is already taxed in their country of residence. So, you can employ anybody to work for you in Nigeria. As long as their country is collecting their tax, Nigeria will not collect their tax. And this also to help creative companies, to help our economy and tech startups. So, so all is well. So, let me give, um, you guys maybe one or two, two minutes each, just if there's anything you want to add or subtract or just, so you have the floor.
Thank you so much, sir, for this opportunity. Uh, my name is Adisa Kocher, and I'm a chartered tax consultant. So, I'm going to say very, very fast. This happened this week. So, um, my firm, we are also a business compliance firm. So, aside taxation, we do other compliance like CAC registrations and the likes. And a client actually came to me last week, and she said, "Okay, I have a business name. I do turnover of about 73 million naira." I'm aware that I'm going to be paying personal income tax based on all the people that have set ring lights and I've been advising everybody, just because I want to push traction to their page. Both the one that know about taxation, the one that does not know about taxation, everybody has been blaring, and it's not like a noise. It's not even a white noise. It's a very noisy noise. So, people are confused, right? And I told her, I said, "Your business name, according to the law, is the same as you. No difference. You just have a structure, right? And it means that if you make 73 million naira in sales and you remove all allowable underlying allowable expenses, right? If you remove all of it, and you have, say, 26 million for your profit, right? At the end of the day, what happens when you're declaring or doing your self-assessment? Because you're not paying PE, you're not working in any organization, right? Even if you were working in an organization, you own a business, you will also do self-assessment different from your pay. Do you get my point? So, you're going to name it income or trade income, and you put that 26 million. That tax table will apply. Do you get? You're only going to get a relief of 800,000 and whatever legit relief that you can get from National Housing Fund, insurance, and the works. It's never going to be as much as you being in a company or having that business name upgraded to a limited liability company. You still maintain your name. You're not losing your name. You just have limited added at the end, and you now have the status of a different entity from you, like our overseer just mentioned. Right? Now, take that 76 million back again as a company. What then happens? You are supposed to pay tax because you've crossed the 50 million naira threshold in sales. Turnover is also sales, right? And it doesn't mean that you're going to pay 30% on that 76 million. No, you will remove all allowable expenses. Please, what is allowed? You can prove it. One, two, there are certain things that terminologies I will not bore you with that cannot be allowed. We'll add them back. To yourself, your, whatever you claim that your normal accountant did for you as profit may not be your taxable profit at the end of the day. Do you get my point? Now, let's assume that same 26 million is what we arrived at. You can now come and say, "Ah, we bought one car in the name of the company." Oh, okay. Where is the receipt? Was it bought in the name of the company truly? If you have proofs of that, it further reduces. You will claim capital allowance. Capital allowance now is no longer a calculation on its own. It is now part of your company income tax. So, if you have capital allowance to claim, it further reduces your taxable income. There are so many other things I won't bore you with. But the long and short of it is that by the time your tax consultant is done with you, you're probably having tax, taxable income of 10, 12, 5 million. Do you get my point? And at the end of the day, you're paying 30% on that. If you are smart, you pay yourself salary. You have director's remuneration, that is also your right. And at the end of the day, you share your profits, and it's that one that LRS or whatever IRS you are under can now be taxing. So, it's cool actually to be a business name. Some people were talking online and they were saying, "Ah, if you do business name, there's some certain requirement you have to meet before you become a company." That changed in the Finance Act of 2019 and kama 2020. It changed it. One person can own a limited liability company. Only you, your director, only you, your shareholder. As long as you don't make sales more than 120 million naira in a year and you don't have assets of more than 250 million naira, the moment you're doing above that, you have to bring in somebody. Do you get? So, we are praying to prosper, right? So, as long as your business is a small business, right? You won't pay any taxes. You'll just be filing new reports for your VAT. Every month, you will log into your portal and you will file new reports for your company contacts. You will file new reports, and then you are not paying any money at all if you make sales less than 50 million, as opposed to being a business name where you would pay a lot of money to the government. Thank you very much.
So, what we are saying now, everybody should become limited. I, I, I'm just giving my advice.
No, that's what, what is that? Everybody should become limited.
It's profitable now to be a limited.
Do you understand now? So, instead of saying you want to just go and do business name of 15,000, 25,000, go and do limited liability company. How much is that one now?
75,000.
75,000. So, is it not better to spend an extra 60,000? So, everybody go and upgrade yourself to what? Limited liability company. Next.
Thank you very much, sir. My name is, uh, Thomas Olabi Eric. I'm a chartered accountant, also a tax practitioner. Okay. I pinned down a few things while, um, the overseer was, um, explaining certain things, and I'd like to just give a few clarifications. And that's, um, regards the rent relief. First and foremost, you need to realize that the rent relief is only applicable to tenants. If you're a landlord, you cannot claim it. Yes, please. It's very important to note. However, it's capped at 500,000 naira and 20% of whatever amount you pay as rent every month. That's what you need to know. You need to understand that what we mean by capping it at 500,000 is if you pay rent of, say, 5 million, for instance, if they calculate 20% of that 5 million, the higher of the lower of the two, if 500,000 is lower than the 20% of 500,000, the government allows you. However, you will have to present an evidence to show that truly you paid these rents. Please take note of that again. When he was explaining, um, the issue of, um, capital gains, you know, capital gains applicable to quite a lot, a lot of things, but he only streamlined the explanation on, um, what do you call it? Um, shares. When you buy properties, for instance, and you decide to sell the property, for instance, you buy a property of 10 million naira and then you decide to sell the property and you make a profit of, say, additional 10 million on it. That 10 million, as long as it's not up to the threshold, you won't be taxed. But once you hit a, a threshold of 50 million and above, the extra will be taxed and be taxed under the year of assessment. Please take note of this. Again, he mentioned, um, um, school registration and all that. It's a, a, a, a topic on its own, and I wish that we will really, um, have time to discuss that. However, I will, um, say one or two things that, uh, business owners need to take into consideration when it comes to skulum, which is, uh, we call some things, um, suspicious transaction report, and we call some, um, some things, um, currency transaction report. These reports are, you know, you're expected to, um, get a compliance officer who will report these transactions as they occur. You hear the government shouting every now and then that there's a threshold of 5 million and all that, and all that, and all that trainings that we got shows that even reporting less than 5 million, depending on how, you know, um, the attitude of whoever is spending that money, is a suspicious transaction. I'll give an illustration. You see someone who possibly comes to church and, uh, okay, who comes to your business and, uh, does, say, transaction of 5 million. All of a sudden, this person begins to do transaction of 20, 30 million. You have the right to report such transactions as suspicious transaction. It's just to save you. What you don't know is everybody seated here, the bank reports your transaction to EFCC. That's just the truth. And that's why we must all take these things very, very seriously. Next year is not going to be business as usual. For you that do not have your TIN, please ensure, as individuals, ensure you have your tax numbers. Ensure transactions that you do go through your bank account, and ensure that the proper narratives are stated, so as to avoid something we call best of judgment. What that means is that the taxman will just look through your system, your, your, your account balance, and assume a figure. It's just to lure you to come and say the truth. And believe me, you cannot win the taxman when it comes to arguments about certain things. But if you are, you know, uh, you have your records in place, you have everything well detailed and explained, you know, uh, you're free. That's just it. Thank you very much, sir.
Thank you. Next.
Praise God. All right. So, my name is Ambassador Ola Daniels, and I'm the church accountant. So, um, I can't say much more, but,
So, if I pay big tithe, you will report me to?
Praise God.
That's our prayer in church.
Yeah. That we should pay big tithes. So, I won't report. All right. So, um, one thing that is very important and will be important starting from January, as, um, our father has said it, is that you have to have structure. There is, we can't give it all in this service, but as time goes on, this is a new, um, development. Even the government themselves, they cannot tell you categorically that they're going to get it 100% starting from year 2026. However, they will be trying their best to get at people, and that is the reason why putting structure in place in your parastatal or the organization is very essential and will become very essential starting from January. So, um, we might be thinking that this, um, tax reform is just to get money from citizens. But the truth remains that this new tax reform is to even help the people below the average income earners and those on the lower level. As an HNI, it will be affecting you more. What do I mean by HNI? That is high net worth individuals, they will be paying more taxes. But for those that are on the average, if you calculate very well, just like the way it was calculated there, from 8.95 to 750, thereabout, you'll be paying lesser if you have structure. That is the reason why you need the services of experts to help you put these things in place. And one of the other things that, one of the good things that I can stress out of this tax reform is that the VATs you pay, there are some zero VATs that you won't be paying VAT on again. Take for example, agriculture, education, um, hotels, and all that that you pay VAT for before, they now become zero VAT. So, you are not going to be paying VAT because the government is going to be paying the company their VAT. They'll be returning VAT to them now. So, it is not you, the consumer, that will be paying the VAT. So, these are part of the good things that this reform. Like I said, it is not something we can totally learn here because it is actually wide. I pray God helps us, you know, um, as our father has said, that give unto Caesar what belongs to Caesar. Don't start looking for ways to dodge all these things because there's no way you are going to do it. They will get you. Your NIN, your BVN, your phone number, they are all linked to your. It is just as if these people knew what they were going to do by starting that we should link all our account numbers and everything. I don't know if they knew, but that is what it is. It is coming to be now. You cannot hide anywhere. And as a matter of fact, for that number 23, the question number 23, where we, we, we can find the calculations of the taxes, it is not a straightforward calculation like that that maybe you earn from between 3 million and, um, 12 million, you just deduct, is it 21% or 18%. It is not just straightforward like that. It starts, every, every taxes starts from the beginning. It starts from deducting the 800,000. Goes, once you earn above 800,000, the threshold, you calculate the percentage. What, once that percentage leaves that threshold, you go to the next threshold. What is left, that is what you are going to deduct using the percentage of that next threshold. I don't know if you understand. You might not understand. That's the reason why you understand. All right. God help us. Thank you. Finally.
Thank you, sir. Um, well done, sir. So, my name is Fei, a chartered accountant, and, um, working with, um, so, you a very good one, sir. Thank you, sir, and thank you to my colleagues. So, I want to say like, um, when was talking, he mentioned that it's a time for accountants, those in, um, the finance, um, sector to do business. So, I want to say something about that, that as business people, we should also be careful because, um, the tax guys, the tax authorities, they are going to do something in 2026 to make sure that, um, tax consultants or those that form as tax consultants to help companies to reduce tax would not be able to do that. Every tax consultant would go through a test with the tax authorities, compliance test, and there will be a list of those that are certified to be tax consultants. So, if anybody is coming to you as a tax consultant, you need, as a business person, you need to check that, um, portal to be sure that this person is certified by the tax authority to be a tax consultant, so that you don't get, um, advised wrongly. That's number one.
From a tax stout. That's my. Then, um, number two, um, regarding the, the, um, t, new tax law, or let me say, finally, regarding the new tax law, we have a lot of information online. For example, the, um, small companies, what the tax manual, the tax act says is a threshold of 50 million, but if you go online, you will see some people are stating 100 million. So, we need to be careful what we're reading online. So, what I advise is, the, the committee that are involved in this tax reform, there's a website that we can always go through, fiscal reforms.ng. You can get any information. Fiscal reforms, F I S C A L reforms, R E F O R M S, ms.ng, NG. Then on, um, X, that's Twitter, fiscal reforms, just fiscal reforms, that's F I S A L reforms. Then they also on TikTok, fiscal reforms NNG. So, any information you need, I would advise you always go to those platforms to get viable and relive information. Thank you.
Okay, so do we have any other questions that you need clarity about? So, how many people have questions? Questions. One, two, three, four, five, six, seven. Okay, so six of you, come out, please. Let's start with Pastor Dedo, and once they have asked your question, you just go back. Hello. Were you lifting up your hand because somebody is about to take your slot? So, let's start with Pastor Dedo. We have 12 minutes. Let's make it count.
Okay. Well, uh, the M is not within the, uh, limited liability company. What is the fate of, uh, incorporated trustee NGO? Is this something we can discuss here, or is it a platform, uh, that one can take advantage of? Thank you.
Answer. Okay. So, for incorporated trustees, yes, you are not supposed to pay taxes. Actually, as an NGO, even if you are, some NGOs operate at limited liability by guarantee, yes, you are not supposed to pay taxes ordinarily. But we have instances where NGOs carry on businesses, right? If you carry on a business and you earn money from that business, you will not, you would have opened the door to get taxed at the end of the day. So, if you know that you're an NGO or you want to incorporate an NGO that allows you to do business in order for you to fund the NGO, because not every NGO has the, um, liberty or the privilege of having sponsors. Do you get? So, if you want to have that kind of structure where you, an NGO that also carries on business and does not pay tax, then I would advise, register a limited liability by guarantee. That way, you are able to still do business, and the proceeds will be implemented in your NGO. Thank you, sir.
Okay. Next.
All right. So, my question is this.
Your name, please.
Okay. My name is Kelvin, and my question is this. How about a company that has a head office still in the same country, but have branches whose branches' income is being sent to the head office? Why the head office set them budget for expenditure? So, this is my question now. Without budget of expedition, which is sent to the branch, be taxed?
Guys, you are the me. I'm a pastor now.
All right. This my question. I said a company that has a branch within the country, and now the income from those branches being sent to the head office account. Why the head office send them budget? So, will the budget sent to the branch be taxed by the federal government?
Sorry.
Budget.
So, um, your company, or the company is seen as one company.
So your company is already being taxed. I mean the headquarter, not the branches. It's not branches that will be paying tax. It is the company because the company is just one.
"Wow. Thank God. Oh," wants to pay C. "Thank you. My name is Nelson."
Okay. Um, you have uh several companies. Now, don't forget that everything is now linked to the same N, the same BVN. Let's assume I have three companies. This one is doing less than 50 million. This is doing less than 50 million. This is doing less than 50 million. But put together they are more than 50 million. So, am I going to be taxed?
"One, two."
"Okay."
"Um, I have a registered agricultural company, maybe that is also into something else. Um, I should get tax holiday for 5 years. So how do you reconcile that? The third one, this particular tax law does uh does it is it separate from what the state does? Is it now something that is general? Because I know that beside these federal laws for tax, the states seem to still have their own. Now, does this exempt you from the ones from state, maybe even local governments?"
Thank you.
"Okay. So, I'm just going to answer your first question and allow my colleagues do justice to the rest. Now, you asked if you as an individual have three companies, right? And they are clearly owned by you, even possibly 100% owned by you. And you have, that means you have um, a tax uh threshold of 150 million naira, right? So you're trying to ask if you'll be taxed individually or if you can still enjoy the taxation on the three companies. If you listen to what the overseer said when he was teaching, he said a company is separate from its owner. So it's just like you have three children, they are three different people. Do you get my point? So they will have different company registration numbers, different things, and they carry on different businesses. Do you get my point? So each company, you will file their individual taxes differently. Even your platform for filing will be different for all three. I hope that answers you."
"So I want to just buttress what um, my professional colleague just said here. Um, being a small company, yes, we understand the fact that uh, you're within the threshold of 50 million below. However, if the properties of that company exceed 250 million, you will be taxed. You should take note of that. It's very important."
"Both of them go parasu."
"Sorry."
"No property. Assets."
"Assets. Yes, the assets of the company if it exceed, you know, by time it's valued and it's we find out that the tax authorities find out that it is more than 250 million, you'll be taxed, not minding it's a small company, 50 million."
"So both of them go."
"You must meet both the turnover and the asset base. I'm running my business in a property worth 200 million."
"And you're good."
"You're good to go. You have not hit the threshold."
"What I'm doing very."
"You're good."
"You're good to go."
"I will be taxed."
"You will not be taxed."
"You will not be taxed."
"Don't let it confuse you. Do you get two things? Two things you must meet as a company. One, your sales is not more than 50 million. And your total assets, your properties, your machinery, everything calculated not more than 250 million naira. You won't pay tax. But if one exceeds, you'll be taxed."
"Okay. Then um, regarding the third question about the states and um, the federal tax. So as individuals, um, staff of companies, you pay your tax, personal income tax to the state. The company pays the tax for you to the state you live in. But companies pay the company income tax to the federal. So it just so the federal has to live with the companies. Then the individual um payee is for the states."
"Please business owner, from next year, if you have one staff, you will start remitting pay for your staff. Take note."
"You know how you were thinking that it's only federal government that is taxing, right? No. If you have a company and you have one staff, if you have a business name and you have one staff, you must process pay for that staff. Do you understand what she's saying?"
"Pay as you earn."
"Pay as you earn."
"That's pay, and it's collected by the state internal revenue service. So where you lay your head is where you pay your tax as an individual."
"If you work in Lagos and you sleep in State, you are to remit your tax to State. Do you get now? Uh huh. So you just to further answer you that it's not only the federal government that is collecting taxes. The the state government is collecting. We mentioned earlier on that business name will be taxed by the state IRS. You're paying personal income tax. Personal income tax is collected by the state. Do you get my point? And then another thing again for business name, not only would you pay personal income tax to the state, you will pay, if you do above 50 million naira, you will pay VAT and withholding tax to FIRS."
Next.
"Thank you very much. My name is Henry. Um, my other question on found on um, incorporated trustees has been answered. Okay. So what of um, a foundation? Somebody has a foundation. What are the tax?"
"Foundation is the same as incorporated trustee."
"Now, for dual for people that are dual citizens and you are you reside overseas, you pay tax there. You also come to Nigeria, you pay tax. So how, how does it work?"
"For you to pay tax, for you to be considered a resident in Nigeria, you must have lived on any relevant day in the in the year for 183 days. So that's why people who have jackpad, even if they are citizens, they don't pay taxes. Do you get my point? But once you're a resident, whether you're a Nigerian or not, you stayed in a place of residence for up to 183 days, you pay tax here. Now, that question would be, how long do you stay in Nigeria? So for us, it doesn't matter how many days you spent as long as you earn any money there, you pay taxes. Do you get my point? So the question now would be this. How long do you stay in Nigeria? Do you stay up to that length of time? If yes, then you are going to pay your tax. Now, the country that you are dwell, you are doing your dual citizenship with, do they have a tax, a double tax treaty with Nigeria? Do you get? If they have, there's a way we calculate all those things. So if you are paying enough tax in that place, you may not have to pay in Nigeria. So that's the whole idea. You don't pay twice. But if you're not paying enough tax, the balance will be paid here in Nigeria. Do you get it now?"
Thank you.
"Next."
"Good evening. Thank you, sir. Thank you for this opportunity. Thank you very much, accountants. Um, while we were learning, I was trying to look into the future and I could see from my own perspective that very soon there will be like 100 businesses to one accountant, and it is going to be a mess very soon. Everybody will be running here and there. Both the things we have learned, we can forget, and you understand. So I want to take us to automation. What are there plans? Do the accountants have like a guild to solve this thing so that we don't rush you? We don't bombard you. Is there a plan to automate this um tax consultation or whatever? Do you understand what I'm saying? Thank you."
"There are softwares that handle all this. For instance, your accountant, as an accountant, depending on the software accounting software you use, you can uh set it up in such a way that it handles your taxes for you. Just impute figures, it just brings them out. Be it withholding taxes, VAT, and uh be it the CIT. Once you impute the um proper data into the system, you know, there are so many software out there, ERPs, the um softwares on the shelf, softwares, and all that. So it's not a problem. And also the government has even made it even easy now. Just go to the website, upload whatever you want to do, you generate, and that that's it."
"Yes, there is a site where you generate where all the."
Next.
"Good evening everyone. Thank you very much, sir. Thank you all for throwing light on this topic. My name is Benjamin. I would like to ask a question. So recently, a client asked me to help uh be a witness to a deed of uh gifts. You know, they want to get their father to sign a deed of gift to the children. So I I kind of probed further and it was like they're trying to evade inheritance tax and, you know, trying to reduce what they will be spending on inheritance tax. So I would like you to throw more light on inheritance tax, deed of gifts, and the application of trust. You know, how we can maximize that to cut down what we lose to government through tax. Thank you."
"Okay. So this what you're trying to do now is get a professional um service free of charge because you're trying to learn how you can actually. I'm sure we've seen that video where um there was there was an influencer that was talking about how the rich hide their money, right? And how Dangote may not be rich as an individual because Dangote is owned by another company that is owned by another company that has their assets under a trust, and he's just a beneficiary. Do you get my point? So that's a whole topic on its own that if we delve into now, won't be done with."
"What of the deed, deed of gifts and yeah, an inheritance tax for wills?"
"Well, like I said earlier on, it is not a straight jacket. Do you get my point? Each scenario has a customized answer. So I will require a lot of questions to be able to answer you. A lot of answers rather, to be able to give you tangible response to what you're asking. Do you get?"
"So please note they are available to assist you beyond this meeting because of time. So you can always walk up to any of them and then we can take it further. Finally."
"Okay. Thank you very much, sir, for the opportunity. I want to ask in terms of registering a limited liability. Can one limited liability hold many companies like you are running, maybe an agency, you have other part of this like like Dangote group of company. Now they do cement. So I want to know."
"Okay. So sometimes we mistake group, the word group is a restricted word when you're registering in CAC, right? I know what you're trying to say. So I have like 30 businesses. Can I put it under one umbrella? Right. We registered a limited liability and the person gave us 30 different businesses and we registered it for him. Do you get? There are two ways to go about this. Um, you know, uh, Indomie is not registered with CAC. It is manufactured and distributed by Dfield Nigeria. Right? So what it means is that Indomie itself as a brand is trademarked. There's a difference between your trade name and your brand name. Sometimes it's the same, but not often. Do you get? So each of those businesses can be brands on their own that you trademark, and it becomes assets to the company, right? Pending when you are ready or now. Now, you can have as many companies as possible to form a group. You have to have three companies, three limited liability companies registered, and all of them must have the following in common. The first name must be common, like Dangote Sugar, Dangote Refinery, Dangote Cement. Dangote is the common name. You, you understand? Common shareholders, common directors, common secretary. All these must be common for you to form a group."
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