06/10/2026
THE NEW TAX LAW: BUSINESS NAME OR COMPANY. DOES YOUR REGISTRATION TYPE MATTER?
Let’s talk about something I keep hearing:
“I will register a Business Name because a company means more tax.”
And another one:
“I don’t want to register a company because I don’t make up to ₦50 million.”
😀 Let’s clear this up as simple as we can.
Under Nigeria’s new tax framework, your business structure can affect how your income is treated for tax purposes.
IF YOU OPERATE AS AN INDIVIDUAL / BUSINESS NAME, Your business income is generally connected to you as an individual for income-tax purposes.
The new tax law provides that the first ₦800,000 of taxable income is taxed at 0%. After that, the next ₦2.2 million is taxed at 15%, with higher bands applying progressively.
But here’s the part people often miss:
We are talking about TAXABLE INCOME not simply every naira that enters your account.
There are applicable rules around deductions, reliefs, exemptions and what constitutes taxable income. So if your business makes ₦1 million in sales, you cannot simply conclude:
“I made ₦1 million, therefore I am taxed on ₦1 million.” The tax calculation requires more than looking at your gross inflow.
NOW LET’S LOOK AT A QUALIFYING SMALL COMPANY.
Under the Nigeria Tax Act 2025, a qualifying small company is subject to 0% company income tax.
The Act defines a small company using:
• Gross turnover of not more than ₦50 million per year
AND
• Total fixed assets not exceeding ₦250 million
There are also conditions and exclusions for example, a business providing professional services is not classified as a small company under that definition.
So don’t hear: “₦50 million” and conclude:
“Once a company makes ₦50 million, tax starts.” That’s not what the provision says.
SO WHY DOES THIS MATTER TO AN ENTREPRENEUR?
Because your CAC registration isn’t just about getting a certificate to frame on your wall. Your choice between a Business Name and a Company can affect how your business is structured legally and how its tax affairs are handled.
And this is exactly why I tell entrepreneurs: Don’t choose your registration type based on rumours.
Don’t say:
❌ “Business Name means no tax.”
Or
❌ “Company means massive tax.”
And don’t say:
❌ “I haven’t made ₦50 million, so there’s no point registering a company.”
Understand the structure first. Your business activities, taxable income, turnover, assets, legal structure and the specific tax rules that apply to you all matter.
ONE MORE THING: The new tax system is not a reason to hide your business. It is a reason to understand your business better.
Know:
🟢 WHAT YOU EARN.
🟢 WHAT IS TAXABLE.
🟢 WHAT YOU CAN DEDUCT.
🟢 WHAT REGISTRATION STRUCTURE YOU HAVE.
🟢 AND WHAT YOUR ACTUAL TAX OBLIGATIONS ARE.
Don’t make business decisions based on “Someone told me…” Get the facts.
Speedmile Creative Enterprise
We don’t just register businesses. We help entrepreneurs understand the structure they’re choosing.
