2026 Nigeria Informal Business Tax Estimator

Worried about how the 2026 tax changes affect your small or informal business in Nigeria. You are not alone. The new Nigeria Tax Act 2025 introduces a simplified presumptive taxation approach aimed at people without reliable books, with implementation expected from 1 January 2026. It also updates thresholds and keeps simple rules for very small traders, so you can stay compliant without expensive accountants. Our estimator turns today’s complexity into clear numbers you can use. It shows a low, medium and high scenario for a turnover-based presumptive tax and flags when VAT or small-company reliefs might apply to you. This helps you plan prices, savings and cash flow with confidence.

Why this matters.

Many informal operators cannot maintain full accounts, which is exactly what the government is trying to fix with a simpler system. The Act empowers government to prescribe a presumptive framework for those with no reliable income records, while keeping progressive personal tax and relief for the smallest operators. Small companies remain fully exempt from Companies Income Tax at higher turnover thresholds than before, and very small traders are still below the VAT registration bar, though filing rules may still apply. Our tool brings these moving parts together in one place so you can make sense of it quickly.

What the tool does.

Enter your annual turnover and choose a conservative, standard or robust presumptive rate. The calculator estimates your potential presumptive tax bill. It also checks two important thresholds that affect many people. First, it flags that VAT registration is generally required only if your annual turnover exceeds ₦25 million. Second, it notes that small companies up to ₦100 million turnover and limited assets remain exempt from Companies Income Tax. These checks help you understand if you are likely dealing with presumptive income tax only or if other obligations may appear as you grow.

Important note.

Exact presumptive tax rates and bands for the informal sector will be set by government regulations under the new Act. Until the official rates are gazetted, this tool provides planning estimates based on internationally common turnover-tax ranges used for informal sectors. Treat the results as guidance for saving and pricing rather than a final bill.

This estimator models a turnover-based presumptive tax, which is a simplified way to compute tax for people without full accounts. Instead of complex profit calculations, it applies a small percentage to your total yearly sales.

Key definitions

Turnover is your total sales for the year, before expenses.
Presumptive tax rate is a simple percentage applied to turnover to estimate tax.
VAT threshold is the annual sales level where you must register for VAT and file returns. Many very small traders remain under this line.
Small-company relief refers to 0% Companies Income Tax for small companies up to ₦100 million turnover and limited fixed assets. If you are not incorporated, you are typically taxed under personal or presumptive rules rather than Companies Income Tax.

Inputs

Annual turnover (₦).

Choose a scenario for the presumptive rate

Low 0.5 percent for very lean margins or policy relief
Standard 1.5 percent as a middle planning case
High 2.5 percent for conservative budgeting

These bands reflect common approaches to turnover taxes for informal sectors in international guidance and research. Final Nigerian rates will be confirmed by regulation.

Core formula

Presumptive Tax = Turnover × Rate

Example A. Zara runs a roadside snacks stand, turnover ₦4,200,000.

Low 0.5 percent → ₦4,200,000 × 0.005 = ₦21,000
Standard 1.5 percent → ₦4,200,000 × 0.015 = ₦63,000
High 2.5 percent → ₦4,200,000 × 0.025 = ₦105,000

VAT check. ₦4.2m is below ₦25m, so she is typically not required to register for VAT.

Example B. Emeka’s phone-accessory kiosk, turnover ₦38,000,000.

Low 0.5 percent → ₦190,000
Standard 1.5 percent → ₦570,000
High 2.5 percent → ₦950,000

VAT check. ₦38m exceeds ₦25m, so he likely needs to register for VAT and file returns. Small-company relief. If he is incorporated and still under ₦100m turnover with limited fixed assets, Companies Income Tax may be 0 percent, but presumptive or personal rules could still apply. He should seek tailored advice as he grows.

Outputs

Estimated presumptive tax for the selected rate.
A VAT message that tells you if you are likely under or over the ₦25m threshold.
A growth note that reminds incorporated users about the ₦100m small-company relief line.
A simple savings tip that tells you how much to set aside monthly to cover the estimated annual tax.

2026 Nigeria Informal Business Tax Estimator

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