30/12/2025
If you run a POS business and you are still using your personal account or business name account, please stop scrolling and read this slowly.
This post may save you money, stress, and embarrassment next year.
FIRST, LET ME CLEAR A BIG CONFUSION
Many POS agents think:
“Government will tax me based on the ₦30 million transaction volume passing through my POS.”
That is NOT correct.
Government is NOT interested in the transaction volume.
Government is interested in your INCOME.
But here is where most POS agents get it WRONG…
THEY ARE TWO DIFFERENT INCOMES POS AGENTS MUST UNDERSTAND
1: Commission from POS platforms (Opay, Moniepoint, PalmPay, etc.)
If you are registered with Opay (for example):
– Opay pays you commission
– Opay already deducts 10% Withholding Tax (WHT)
– That tax has already been REMITTED to government
So yes - that part is already reported.
But…
That does NOT end your tax obligation.
2: EXTRA CHARGES YOU COLLECT FROM CUSTOMERS (This Is The Big One)
As your Financial Literacy Advocate, Let me explain this carefully.
A customer withdraws ₦20,000
You charge ₦300
That ₦300 is NOT commission.
That ₦300 is NOT expense.
That ₦300 is YOUR BUSINESS INCOME.
Now multiply that by volume.
Let’s say:
– Monthly transaction volume: ₦30 million
– Average daily withdrawals
– Total charges collected in a month: ₦200,000
That ₦200,000 is:
Income
Profit-driven
Taxable
What government is interested in
Not the ₦30 million.
NOW HERE IS WHERE MANY POS AGENTS ENTER TROUBLE
Because most POS agents:
– Mix personal money with POS money
– Use personal accounts
– Keep no records
– Don’t separate commission from customer charges
– Don’t track expenses
So when tax officers look at the account…
They see inflow.
They see movement.
But they see NO STRUCTURE.
And when structure is missing, estimation enters.
And estimation is never friendly.
If you run POS with:
Personal account
Business name (enterprise)
No proper record
The law sees you as an individual.
And under Personal Income Tax:
₦800,000 annual threshold
That’s just ₦66,000 per month.
So even if:
– Your real POS income is ₦200k/month
– But you can’t prove expenses
– And inflow looks large
You may be taxed wrongly.
Not because government is wicked
but because you failed to explain yourself with records.
NOW LET ME SHOW YOU THE SMART STRUCTURE
STEP 1: Register a Limited Liability Company (LTD)
Once you operate as an LTD:
You and the business become separate
Your threshold moves from ₦800k to ₦100 MILLION
Companies under ₦100m turnover pay 0% Company Income Tax
That alone is powerful.
STEP 2: Open TWO Corporate Accounts
Account 1 - POS COLLECTION ACCOUNT
– All POS commissions
– All customer charges
– Nothing spent here
Account 2 - EXPENSE ACCOUNT
– Rent
– Data
– POS paper
– Generator fuel
– Transport
– Repairs
– POS charges
– Salary (yes, even to yourself)
This automatically creates your records.
No accountant stress.
STEP 3: Keep Receipts (THIS IS YOUR SHIELD)
In taxation, there is what we call:
Allowable expenses
Non-allowable expenses
If you keep receipts:
– Rent
– Transport
– Power
– Data
– Repairs
– Maintenance
Your taxable profit becomes very small, sometimes ₦0.00.
Let me add this, Before I forget:
CBN has already announced new cash limits starting 2026.
This does NOT kill POS.
It simply means:
– More card transactions
– More digital payments
– More traceability
– More reporting
Which means:
POS operators must be structured.
Not afraid.
Here's my Advice:
Government is NOT taxing transaction volume.
Government is taxing income.
But income must be proven.
If you don’t explain your money properly,
the taxman will explain it FOR YOU.
And trust me…
You don’t want that version.
