How does the new tax law affect your business?

Amina decides to register her business with the Corporate Affairs Commission (CAC): She chooses Limited Liability Company (Ltd) — It costs about ₦65,000 - ₦85,000.

The company is now separate from her as an individual. If the business makes ₦30million for the whole year but she only pays herself ₦6 million, she only pays personal income tax on the ₦6 million. The company pays 0% tax on the remaining profit after her operating costs (under the “Small Company” exemption).

This short article is an explainer on taxes for small businesses with less than 50 million naira in annual revenue.