What Nigeria’s New Tax Law Really Means for You
A major shift is coming to Nigeria’s tax system, and it will affect millions of small business owners — especially those still registered as Business Names.
The new Tax Laws coming into effect January 1, 2026, raises the turnover threshold for small companies from ₦25 million to ₦100 million and grants generous tax reliefs to formally registered Limited Liability Companies (LLCs).
This change is designed to encourage business formalization — rewarding those who operate legally as registered companies, while leaving informal and unincorporated businesses outside the tax incentives.
The Old Law (Before 2026)
Under the previous tax regime:
Only companies with turnover below ₦25 million were exempted from Company Income Tax (CIT).
Many micro and small enterprises still paid tax or filed minimum returns.
Business Names and unregistered enterprises were taxed under Personal Income Tax, which offered no company-level exemptions.
Withholding Tax (WHT) and VAT still applied to most transactions.
In essence, the system favored formal entities but still limited how many businesses could qualify for true tax relief.
The New Law (Effective January 1, 2026)
The new Finance Act expands and restructures these benefits:
Companies with annual turnover below ₦100 million now qualify for 0% Company Income Tax, 0% VAT, and 0% Withholding Tax.
These exemptions apply only to registered Limited Liability Companies.
Business Names and sole proprietorships remain under the Personal Income Tax regime — meaning they will continue paying higher tax rates and won’t enjoy the new reliefs.
This is a bold government effort to encourage formalization — pushing entrepreneurs to convert informal or semi-formal operations into structured companies that can grow, employ, and contribute to the economy.
What This Means for Business Owners
If your business is still registered as a Business Name, here’s the simple truth:
You will not qualify for the ₦100 million tax exemption.
You’ll continue paying personal income tax rates, which can reach up to 24%.
You’ll face increasing pressure from clients, banks, and suppliers who now prefer or require dealing only with registered companies that have CAC certificates and valid Tax Identification Numbers (TINs).
As the 2026 deadline approaches, CAC offices will experience heavy backlogs as thousands rush to convert.
Now is the time to upgrade — not when it’s too late.
Why You Should Upgrade Now
Upgrading your Business Name to a Limited Liability Company (LTD) gives you:
Tax Protection: Access to the ₦100 million turnover tax-free bracket.
Credibility: Instantly increases trust with corporate clients and partners.
Legal Protection: Your personal assets are shielded from business risks.
Access to Funding: Most banks and investors require company documents.
About TBD & GC Limited
TBD & GC Limited, part of the Tersur Group, has been helping Nigerian entrepreneurs, ministries, and organizations with CAC registrations and upgrades for over 10 years.
We’ve built a reputation for speed, transparency, and excellence — processing hundreds of successful upgrades and company formations across Nigeria.
We don’t just file documents; we help you structure your business for growth and protection.
Our Packages
Business Name Upgrade
Standard Upgrade – ₦65,000:
Full CAC conversion to Limited Liability Company (LTD).
Comprehensive Upgrade – ₦120,000:
Conversion + Common Seal + EFCC SCUML Registration.
(If your annual returns are pending, they must be updated before conversion.)
Act Now — Before the Rush Begins
Thousands of Business Name owners will rush to upgrade in December 2025 and January 2026. CAC and FIRS systems will be overwhelmed. Processing time will increase and costs are likely to rise.
Protect your business now. Don’t wait until tax compliance becomes a penalty issue.
Contact Us
Office Address:
Suite 103, Nwukpabi Plaza, No. 14 Ibrahim Waziri Crescent, Gudu District, Abuja
Call or WhatsApp: +234 802 951 5932
We’ll answer your questions, review your current status, and guide you step-by-step through your Business Name upgrade or new company registration.
Upgrade today — secure your tax advantage and protect your business future before January 2026.