Vi-M Professional Solutions

Author: Vi-M Professional Solutions

  • Your Pension Is Not Just for Retirement; It Is a Strategic Financial Tool

    Your Pension Is Not Just for Retirement; It Is a Strategic Financial Tool

    When discussions about pensions arise, most people immediately associate them with retirement. While retirement is an important outcome, pension contributions serve a much broader purpose. They represent a structured, disciplined and tax-efficient method of building long-term financial security, for both employees and employers.

    Why Pension Matters Beyond Retirement

    Pension systems are designed to ensure income continuity in old age, but their relevance begins far earlier. By contributing consistently throughout employment, individuals create a financial buffer that grows with time. For employers, pension schemes form part of responsible workforce management, reflecting commitment to employee welfare and long-term stability.

    The Tax Efficiency Advantage

    One of the most under-emphasized benefits of pension contributions is their tax impact. In Nigeria, qualifying pension contributions under the contributory pension scheme are tax-deductible. This means that a portion of income is channelled into personal savings rather than being fully exposed to taxation.

    For employees, this translates into:

    • reduced current taxable income
    • higher long-term savings
    • structured and disciplined wealth accumulation

    For employers, pension contributions allow more strategic compensation planning that delivers real value to employees while remaining compliant and fiscally efficient.

    Compounding and Long-Term Wealth Creation

    Pension funds are typically invested over long periods. This extended investment horizon allows compound returns to work more effectively than short-term or irregular personal savings. Over time, this significantly improves retirement outcomes without the pressure of trying to accumulate large sums late in one’s career.

    Employer Contributions as Added Value

    Under the Nigerian contributory pension scheme, both employers and employees contribute. The employer’s portion represents direct financial value to the employee and demonstrates organisational responsibility. Beyond individual benefits, funded pension schemes also support capital market development and overall economic stability.

    Voluntary Pension Contributions: Building Flexibility into Your Pension Strategy

    Beyond the mandatory minimum contributions, Nigerian pension regulations allow individuals to make Voluntary Pension Contributions (VPCs). This option enables employees and self-employed individuals to contribute additional amounts into their Retirement Savings Account beyond statutory requirements.

    The practical advantages include:

    • accelerated retirement savings for individuals who start late or earn higher incomes
    • additional tax-efficient savings, subject to regulatory conditions
    • flexibility to increase contributions during high-earning periods
    • a structured alternative to informal or undisciplined long-term savings

    Voluntary contributions are particularly useful for professionals, business owners and senior executives who wish to strengthen their long-term financial position without relying solely on statutory minimums.

    Pension and Expatriate Employees: What the Law Allows

    Under the Pension Reform Act 2014, participation in the Nigerian contributory pension scheme is generally mandatory for employees working in Nigeria, including expatriates, except where an exemption applies.

    In practice:

    • Expatriates on temporary assignmentswho maintain an existing pension arrangement outside Nigeria may be exempt, subject to compliance with applicable regulations.
    • Expatriates who are permanently resident in Nigeria, including spouses of Nigerians or long-term assignees without alternative pension coverage, are typically required to participate in the Nigerian pension scheme.
    • Employers remain responsible for ensuring correct classification, documentation and compliance for expatriate employees.

    As a result, pension participation for expatriates should be assessed case-by-case, based on residency status, assignment duration and existing pension arrangements.

    A Structured Approach to Financial Security

    Without structured pension systems, many individuals under-save for the future due to short-term financial pressures. Pension contributions help address this by:

    • enforcing financial discipline
    • promoting long-term planning
    • reducing dependence on family, employers or government support in later years

    The Broader Business Benefit

    Organizations that implement pension contributions effectively tend to experience better employee retention and improved workforce financial literacy. Both outcomes contribute to productivity, reduce HR risk and enhance organizational image.

    Conclusion

    Pension contributions should not be viewed solely as a retirement vehicle. They form part of a prudent financial strategy that promotes tax efficiency, long-term wealth creation and organizational responsibility. For individuals and employers alike, pensions are an essential component of financial planning and workforce welfare, and the earlier they are prioritized, the stronger their impact becomes.

  • Annual Employer PAYE Returns: 31 January Filing Reminder

    Annual Employer PAYE Returns: 31 January Filing Reminder

    As we approach the statutory deadline of 31 January, employers are reminded of their obligation to file Annual Employer Pay-As-You-Earn (PAYE) Returns for the preceding calendar year.

    This filing is a mandatory statutory return, required under Nigerian tax law, and applies to all employers with employees in Nigeria – regardless of size, sector, or PAYE outcome for the year.

    Across the country, State Internal Revenue Services, the FCT Internal Revenue Service, and the Nigeria Revenue Service (NRS) have commenced annual return notification, monitoring, and enforcement activities for the current filing cycle.

    What Annual Employer PAYE Returns Are

    Annual employer PAYE returns are the statutory annual disclosure of emoluments paid to employees during the year, submitted by employers to the relevant tax authority.

    They serve as the tax authority’s primary annual control mechanism for:

    • verifying employee income disclosures,
    • reconciling payroll records against PAYE remittances,
    • validating employee residency and filing jurisdiction, and
    • confirming compliance with PAYE, reliefs, and statutory deductions.

    Who Is Required to File

    Annual employer PAYE returns must be filed by all employers, including:

    • companies and corporate entities,
    • SMEs and startups,
    • NGOs, associations, and religious bodies with paid staff,
    • schools, hospitals, and professional firms,
    • employers with one or multiple employees, and
    • employers whose employees earned below the taxable threshold (nil returns still apply).

    There is no exemption based on employee count, profitability, or PAYE position.

    Where Employers Should File (Jurisdiction Guidance)

    Employers are required to file annual returns based on the category and residency status of their employees, as follows:

    State Internal Revenue Services / FCT-IRS
    Employers file to the tax authority of the State or the Federal Capital Territory (FCT) where the employee is resident.

    Nigeria Revenue Service (NRS)
    Employers file to the NRS in respect of:

    • members of the Nigerian Armed Forces, Police, and other specified federal services (in non-civilian capacity),
    • officers of the Nigerian Foreign Service, and
    • non-resident employees deriving income from employment in Nigeria who are not resident in any State or the FCT.

    Information Typically Required from Employers

    In line with notices currently being issued by tax authorities and the requirements of the Nigeria Tax Administration Act, employers are required to submit comprehensive annual PAYE schedules together with supporting documentation.

    Typically required information includes:

    • detailed employee PAYE schedules disclosing for each employee gross emoluments (including allowances and benefits in kind), total deductions, net emoluments, and tax deducted for the year;
    • Employers’ Annual Declaration and Certificate (Form H1) relating to employees’ income and tax paid;
    • schedule of PAYE remittances made during the year, supported by revenue receipts or payment evidence;
    • evidence of statutory payments relevant to the employer, including business premises levy and development levy;
    • evidence of actual rent paid by employees, where rent relief is to be applied in payroll computations; and
    • projected annual payroll for the subsequent year, together with schedules of withholding taxes remitted in the preceding year, where requested.

    Tax authorities increasingly rely on these schedules to reconcile payroll disclosures against PAYE remittances and employee records. Submissions that are incomplete or inconsistent often attract follow-up queries and compliance reviews.

    Consequences of Late or Non-Filing

    Under the Nigeria Tax Administration Act, 2025, failure to file statutory returns attracts administrative penalties, irrespective of whether PAYE has otherwise been deducted or remitted.

    Specifically:

    • a taxable person who fails or refuses to file required returns is liable to ₦100,000 in the first month in which the failure occurs and ₦50,000 for each subsequent month the failure continues; and
    • persistent non-compliance may also result in compliance flags on the employer’s tax record, follow-up compliance queries or PAYE audits, delays or denial of Tax Clearance Certificates, and broader compliance reviews beyond the year under consideration.

    These penalties accrue monthly until the filing obligation is met.

    How Vi-M Supports Employers

    Vi-M supports employers through focused, practical interventions around annual PAYE returns, including:

    • pre-filing payroll and PAYE reconciliation reviews to identify inconsistencies before submission;
    • employee TIN and payroll data validation to reduce rejection risks and post-filing queries;
    • residency and jurisdiction checks, particularly for mobile, hybrid, or non-resident staff;
    • pension and statutory deduction alignment to ensure disclosures are defensible; and
    • quiet corrective filings to address legacy gaps without triggering unnecessary enforcement actions.

    Our approach is preventive and compliance-first, helping employers meet statutory obligations accurately and on time.

    Final Note

    The 31 January deadline is fixed by law. Employers are advised to complete filings early, review submissions carefully, and seek professional support where payroll structures, employee movements, or classifications require clarification.

  • Nigeria’s Reform Era: Turning Complexity into Opportunity for Global Businesses

    Nigeria’s Reform Era: Turning Complexity into Opportunity for Global Businesses

    Foreign companies are once again paying close attention to Nigeria. With a population of more than 220 million, a fast-growing digital economy, rising entrepreneurial activity and renewed policy interest in attracting investment, Nigeria remains one of Africa’s most compelling consumer and industrial markets.

    But 2026 presents a more complex entry landscape than many investors anticipated. Ambitious tax reforms, stronger compliance enforcement and evolving regulatory expectations have created an environment where opportunity and uncertainty coexist. For global firms, the difference between success and setback increasingly lies in how well they interpret and strategically respond to this new economic terrain.

    Reform Is Reshaping the Opportunity

    Nigeria’s ongoing reform efforts aim to modernize revenue systems, widen the tax base, improve transparency and enhance competitiveness. These goals are good for the country’s long-term positioning and are aligned with global trends. Yet reforms rarely operate in a straight line. They alter timelines, reporting standards, documentation requirements, strategic assumptions and in some cases, sector-specific incentives.

    Understanding the technical details of regulation is only part of the equation. Companies must also understand how such reforms are implemented in practice, how regulators interpret them and how they interact with operational decisions. In this new era, policy fluency is as important as traditional compliance.

    Foreign Companies Face a Local Knowledge Gap

    International firms typically excel at financial modelling, strategic planning and operational scaling. However, reform cycles, especially in emerging markets, introduce variables that global playbooks do not always anticipate. Common blind spots include:

    • tax exposure and optimization
    • sector-specific compliance requirements
    • incentive eligibility and timing
    • documentation and reporting standards
    • regulatory relationships and interpretation
    • operational risk and sequencing

    Each blind spot can introduce cost, delay or risk individually manageable, but collectively capable of undermining entry timelines and eroding return on investment.

    Local Expertise Is Now a Competitive Advantage

    In this reform environment, local partnership has evolved from a compliance requirement into a strategic advantage. Companies with strong local partners:

    • enter markets faster
    • navigate reforms with clarity
    • optimize tax and incentives intelligently
    • interpret regulatory shifts early
    • avoid costly rework and penalties
    • structure operations more efficiently

    In short, reform complexity rewards local intelligence.

    How Vi-M Helps Global Companies Turn Complexity into Opportunity

    Vi-M Professional Solutions supports foreign companies through the full lifecycle of market engagement, from pre-entry planning to operational execution, ensuring that compliance, tax optimization and regulatory strategy support rather than constrain business objectives.

    Vi-M provides:

    • deep tax and compliance expertise
    • market entry and expansion advisory
    • reform interpretation and strategic insight
    • tax planning and incentive optimization
    • regulatory liaison and documentation management
    • operational risk assessment and guidance

    By integrating technical expertise with practical, on-the-ground knowledge, Vi-M enables international companies to convert reform complexity into competitive advantage and operational confidence.

    The 2026 Takeaway

    Nigeria’s reform agenda seeks to make the country more transparent, more modern and ultimately more attractive for long-term investment. But during this transition, complexity favors companies that partner wisely. For foreign firms, collaborating with the right local advisor can transform regulatory uncertainty into a pathway for sustainable growth.

  • 2026 Begins with New Tax Laws Amidst Controversy: What Businesses Must Know and Do Now

    2026 Begins with New Tax Laws Amidst Controversy: What Businesses Must Know and Do Now

    Nigeria’s long-awaited tax reforms officially took effect on 1 January, 2026, following the signing into law of four major Acts in 2025:

    1. Nigeria Tax Act 2025 – Revises major substantive tax rules, thresholds, and definitions
    2. Nigeria Revenue Service (Establishment) Act 2025 – Replaces FIRS with NRS as the central authority
    3. Nigeria Tax Administration Act 2025 – Consolidates tax administration procedures
    4. Joint Revenue Board of Nigeria (Establishment) Act 2025 – Coordinates state-federal tax activities

    However, their implementation has not come without chaos. Unprecedentedly, multiple (up to three) conflicting gazetted versions of these laws surfaced, creating widespread confusion. The National Assembly later declared that the versions initially published did not match the versions passed by the legislature. In response, it released a harmonised “final” gazetted version (downloadable here-  https://drive.google.com/drive/folders/1Zeh1m33wgwcuZyzBJf-U6ExB7WqhaSHa) correcting inconsistencies and clarifying provisions, such as:

    • Aligning the threshold for “small businesses” and “small companies” at ₦100 million annual turnover
    • Resolving definitional and drafting inconsistencies across the Acts

    While many professionals still suspect patch-up efforts were made behind the scenes, the harmonized versions are now the official legal basis for tax compliance going forward.

    Key Takeaway for Businesses: These Laws Are Now in Effect

    Despite the controversies, the reforms are now enforceable. All businesses, from startups to conglomerates – must now take swift action to align with the new legal framework.

    What Should Businesses Begin to Do Immediately?

    1.         Study the Final Gazetted Versions

    CFOs and tax leads should ignore earlier conflicting gazettes and focus only on the National Assembly’s final harmonized versions.

    2.         Conduct a Full Impact Review

    Evaluate how the new reforms affect your business operations, legal structure, and financial arrangements.

    3.         Update Internal Tax Systems and Processes

    Businesses must:

    • Integrate new rates, exemptions, and classifications into self-assessment tools and payroll systems
    • Adopt digitised accounting, tax reporting, and document retention systems
    • Invest in tax technology that enables automated calculations, filings, and audit traceability
    • Educate management and key personnel on the new legal and regulatory expectations

    4.         Set Up Updated Compliance Calendars

    Establish a robust monthly compliance calendar to ensure timely and accurate fulfilment of the following:

    • PAYE remittances for employers and businesses
    • VAT filings – Ensure monthly VAT filings capture all VAT on business expenses, capital/fixed assets, and other allowable input VAT for claims
    • Other filings – Transfer Pricing (TP) returns, Controlled Foreign Company (CFC) returns, incentive returns, and returns by virtual asset providers
    • Corporate Income Tax (CIT) and CGT self-assessments and filings, incorporating new thresholds, exemptions, and top-up provisions
    • 4% Development Levy – A new 4% Development Levy replaces overlapping sector-specific charges (e.g., NASENI, TETFund, NITDA). It applies across board to qualifying companies.
    • Filing of tax planning returns, notifications of accounting date changes, and business reorganisation disclosures
    • WHT filings (under the reinforced TAA) – The Nigeria Tax Administration Act 2025 strengthens WHT enforcement – including: Penalties for failure to deduct or remit and tighter audit controls on contract and vendor payments

    5.         Assess E-Invoicing Readiness and Integrations

    With e-invoicing now mandatory under the reforms:

    • Register and obtain e-invoicing credentials with the NRS
    • Integrate your ERP or accounting systems
    • Train staff on how to generate, issue, and submit compliant e-invoices

    6.         Implement Strong Risk Management Controls

    To manage tax risks proactively:

    • Conduct regular tax risk assessments and maintain detailed documentation
    • Engage regularly with your tax consultant for guidance, updates, and strategic planning
    • Monitor evolving regulatory guidance and align business practices accordingly
    • Verify incentive eligibility and tax exemptions periodically

    7.         Review Transfer Pricing and Group Structures

    Enhanced controls on related-party transactions and business presence may affect cross-border operations and restructurings.

    8.         Prepare for Digital Enforcement and Stronger Audit Powers

    The Nigeria Revenue Service (Establishment) Act 2025 introduces new audit capabilities, technology-based enforcement, and centralized revenue collection authority.

    A New Tax Era: Be Informed, Be Compliant

    The year 2026 begins with sweeping tax reforms now in force. Businesses must rise to the challenge of:

    • Staying informed and alert
    • Ensuring monthly and annual compliance discipline
    • Leveraging e-invoicing and audit readiness
    • Adapting to new rules and levies

    At Vi-M Professional Solutions, we are already reviewing the final versions of these reforms and are prepared to support clients through:

    • Industry-specific updates
    • Digital compliance tools
    • Real-time tax advisory
    • End-to-end monthly tax support

    For enquiries about the new tax laws, or to discuss how Vi-M can assist you navigate the compliance obligations under the tax reforms, do not hesitate to send us an email via clients@vi-m.com.

  • We are Back and Ready for What 2026 Brings

    We are Back and Ready for What 2026 Brings

    Vi-M Professional Solutions has officially resumed operations for the year and we are stepping into 2026 fully prepared for the changes ahead.

    A new year always comes with uncertainties and new opportunities.  In Nigeria, for the business world, this year comes with new tax reforms. We understand that regulatory changes can feel overwhelming, uncertain, or disruptive to business operations. But for our clients, there is no cause for concern.

    At Vi-M Professional Solutions, navigating complexity is what we do best. Whether it is evolving tax laws, compliance obligations, tax technology / digital tax obligations, the growing intersection between finance and technology, regulatory filings, or payroll challenges our role remains clear: to protect your business, simplify compliance, and help you move forward with confidence.

    To our existing clients, thank you for your continued trust. You can be assured that:

    • Your compliance remains a priority
    • Emerging tax reforms are being proactively monitored
    • Risks are being anticipated and managed
    • Practical, tailored solutions will always come before panic

    And to businesses looking for a reliable partner, this is the year to get it right.

    Vi-M Professional Solutions provides end-to-end support across tax advisory, audit & assurance, accounting, payroll & HR services, regulatory compliance, immigration / market entry support, and tax technology solutions, all delivered with depth, clarity, and integrity.

    In 2026, we remain committed to being more than service providers.

    We are your thought partners, your problem-solvers, and your compliance backbone.

    Here is to a year of clarity, stability, and sustainable growth.

    We are ready, Are you? Reach out. Let us build with confidence. Send an email to clients@vi-m.com with your service needs or enquiries.

  • With Gratitude – Season’s Greetings from Vi-M Professional Solutions

    With Gratitude – Season’s Greetings from Vi-M Professional Solutions

    As the year draws to a close, we want to pause and say thank you.

    Thank you for trusting Vi-M Professional Solutions with your business, your people, and your most important decisions. Thank you for the conversations, the collaborations, the challenges that stretched us, and the wins we celebrated together. Serving you this year has been both a privilege and a joy.

    Every engagement, every call, every shared goal has reinforced why we do what we do – not just as advisors, but as partners invested in your success. We are deeply grateful for the opportunity to walk this journey with you.

    As we look ahead to 2026, we do so with excitement and purpose – committed to building an even deeper partnership, delivering greater value, and supporting you through growth, change, and new possibilities.

    Holiday Notice:
    Please note that we will be closing today, 15 December 2025 for the holidays. However, we will be running very skeletal operations until Friday, 19 December 2025.

    Our full operations will resume on Monday, 12 January 2026.

    From all of us at Vi-M, we wish you and your loved ones a peaceful, joyful, and refreshing Christmas season, and a New Year filled with clarity, progress, and abundance.

    Thank you once again for being part of our story.

    We look forward to continuing the journey with you.

    Regards,
    -The Vi-M Professional Solutions Team.

  • Nigeria Rising: The Smart Investor’s Gateway to Africa’s Future (Why global investors are rediscovering Nigeria)

    Nigeria Rising: The Smart Investor’s Gateway to Africa’s Future (Why global investors are rediscovering Nigeria)

    Across the global investment landscape, one truth is becoming clear: the world’s fastest-growing opportunities are no longer in saturated markets, but in dynamic, evolving economies with strong demographics and untapped potential.
    And few places embody this shift as powerfully as Nigeria.

    Nigeria is not merely Africa’s largest economy by population and market size, it is a country undergoing a quiet but profound economic reconfiguration. Behind the headlines and temporary fluctuations is a nation building the foundations for a renewed cycle of growth: improved transparency, structural reform, demographic strength, and an expanding private sector that is attracting global attention.

    For investors with the right guidance, Nigeria is more than a destination, it is the gateway to long-term strategic advantage on the African continent.
    And that is where Vi-M Professional Solutions plays a pivotal role.

    Nigeria’s Investment Case: A Market Too Big to Ignore

    With over 230 million people, a rapidly urbanising middle class, and one of the youngest populations in the world, Nigeria presents an unmatched consumer and labour market.
    More importantly, the country’s ongoing reforms, from exchange rate adjustments to renewed private-sector collaboration, are creating a clearer, more modern environment for sustainable investment.

    Nigeria’s economy is diversifying at a pace rarely seen in its history. Sectors such as fintech, renewable energy, agribusiness, logistics, healthcare, manufacturing, and professional services are evolving from small-scale opportunities into major investment corridors.

    Foreign investors who understand this shift are beginning to recognise Nigeria for what it truly is: A high-potential market entering a new phase of structural maturity.

    A Country in Transition and Why That Matters

    Every major emerging market goes through a period of recalibration: India in the 1990s, Indonesia in the early 2000s, Vietnam a decade ago.

    Nigeria is in that phase today, recalibrating systems, updating data, liberalising key sectors, and building the institutional foundation for sustainable long-term growth.

    Investors willing to look past short-term adjustments and focus on fundamentals will see what truly matters:

    • A rapidly growing digital economy
    • Rising foreign investor interest in manufacturing and energy
    • Strong demographic demand for housing, healthcare, and consumer goods
    • An expanding services sector driven by talent and innovation
    • Increased openness to private capital and partnerships

    In other words, Nigeria’s transition is not a setback, but it is preparation for expansion.

    Where the Opportunities Are Emerging

    1. Energy & Renewables

    Nigeria’s enormous energy demand makes the renewable sector, especially solar and hybrid power solutions, one of the most promising in Africa. Industrial clusters, estates, and SMEs are actively transitioning to sustainable energy sources.

    2. Technology & Digital Infrastructure

    Nigeria’s fintech sector is already the largest in Africa, but the growth extends far beyond payments. Cloud services, cybersecurity, e-commerce, AI-driven logistics, and digital education are expanding rapidly, attracting global technology firms.

    3. Agribusiness & Value-Addition

    With one of the continent’s largest agricultural outputs, Nigeria is shifting from raw-commodity dependence to processing, packaging, and export-ready manufacturing.
    This makes it a prime location for Agri-processing plants, storage systems, logistics investments, and integrated value chains.

    4. Manufacturing & Industrialisation

    Government incentives, industrial zones, and regional market access through AfCFTA are turning Nigeria into a hub for light and medium manufacturing.

    5. Real Estate, Housing & Infrastructure

    Urbanisation is accelerating. Demand for industrial warehouses, energy-efficient housing, commercial properties, and transport infrastructure continues to surge.

    6. Professional Services & Compliance Solutions

    As the business environment modernises, there is a rising need for reliable tax services, corporate governance, accounting, HR structuring, and regulatory compliance, areas where experience and precision are critical.

    The Difference Between Opportunity and Success: Having the Right Partner

    Entering Nigeria offers high rewards, but like any major emerging market, it requires expert navigation. This is where Vi-M Professional Solutions becomes indispensable.

    Vi-M is not just a service provider; it is a strategic partner for foreign businesses looking to enter or expand in Nigeria. With deep expertise across regulatory processes, tax advisory, corporate setup, HR solutions, feasibility studies, and ongoing business support, Vi-M ensures that investors do not simply enter the market, they enter it correctly, confidently, and compliantly.

    Vi-M helps investors with:

    • Detailed market-entry research and feasibility studies
    • Full company incorporation and regulatory approvals
    • Tax, accounting, and compliance structuring
    • Immigration, HR and employment setup
    • Partner identification and operational support
    • Expansion planning and advisory
    • Ongoing representation and liaison services

    In a market where knowledge, relationships, and compliance are crucial, Vi-M provides the clarity and structure that global investors need.

    Why Now Is the Right Time

    Global investors are increasingly seeking alternative growth markets, places with real demand, ready talent, and long-term potential. Nigeria fits this profile perfectly.

    The combination of demographic strength, policy restructuring, technology adoption, and regional access makes it one of Africa’s most strategic investment frontiers. With the right partner, the path becomes smoother, clearer, and significantly more rewarding.

    Investors who move early and wisely will be positioning themselves at the centre of Africa’s next wave of economic expansion. And with Vi-M Professional Solutions guiding each step, foreign investors can turn opportunities into sustainable success stories.

  • VAT Reloaded: What Changed, What Moved, and What It Means

    VAT Reloaded: What Changed, What Moved, and What It Means

    Nigeria has given Value Added Tax (VAT) a full makeover. The Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025 have reshaped how VAT works, who must register, when VAT kicks in, how returns are filed, and what counts as exempt or zero-rated.

    Some of these updates look cleaner on paper, but the real story depends on how well businesses and consumers adjust. Let us break it down.

    What VAT Really Is

    VAT is the 7.5 percent tax added to goods and services. Businesses collect it on behalf of the government, while the Nigeria Revenue Service (the Service) tracks compliance and collects the revenue.

    Who Needs to Register and Comply

    Big and medium businesses must register, charge VAT on their taxable supplies, and file monthly VAT returns.

    Small businesses (with annual turnover of ₦50 million or less) are exempt from VAT obligations. They do not need to:

    • register,
    • charge VAT,
    • file monthly VAT returns, or
    • self-account for VAT.

    Optional registration: Small businesses can choose to opt in by writing to the Service. Once they opt in, they must register, charge VAT, and file returns like bigger businesses.

    What Counts as “Small”

    • A small business has annual gross turnover of ₦50 million or less and total fixed assets not above ₦250 million.
    • Once a business crosses that threshold, it moves into full VAT compliance and must file monthly returns.
    • When checking if the threshold is exceeded, ignore:
      • the value of any capital assets sold, and
      • a one-off sale due to business closure or transfer.

    These do not push a business over the limit.

    Professional service providers are excluded from this exemption. Even if turnover is small, they must register and charge VAT.

    Non-Resident Suppliers (Foreign Sellers)

    • If you make taxable supplies to Nigeria, you must register for VAT in Nigeria or appoint a Nigerian representative.
    • Where the supply is made from outside Nigeria to a Nigerian customer, the Nigerian recipient withholds and remits the VAT to the Service.
    • The Service may also appoint any person (including non-residents) to collect and remit VAT on its behalf.
    • For imports through online platforms, once VAT has been collected by the Service or an appointed person, the goods are not charged again at the border if proof of VAT payment is shown.

    VAT Invoices and Fiscalisation

    A valid VAT invoice must:

    • use sequential invoice numbering, and include
      • supplier Tax ID,
      • invoice number and date,
      • supplier and purchaser details,
      • gross transaction amount, and
      • VAT charged and the rate.

    It must be issued at the time of supply.

    E-Invoicing Is Here

    The Merchant Buyer Solution (MBS) is Nigeria’s national e-invoicing platform. It has already gone live. The Service directed large businesses to connect from July and August this year.

    How it works:

    • Taxpayers do not connect directly to the Service. They connect through licensed System Integrators and Access Point Providers who link organizations’ systems to MBS.
    • All VAT invoices are validated electronically through the Access Point Provider before being issued to customers.
    • No validation = no valid invoice.
    • The Service sees transactions in real time, making late or retroactive reporting difficult.

    Penalties are strict:

    • Refusing or delaying connection after notice attracts a ₦1 million penalty plus daily fines.
    • Failing to process transactions through the system attracts further penalties, including 100 percent of the tax due plus interest.

    Cashflow implications: Real-time invoicing forces businesses to align accounting entries with actual tax events. VAT is triggered at supply, invoicing, or payment.

    The rollout began with big businesses, but more taxpayers will be added over time. E-invoicing is no longer optional.

    When VAT Enters the Chat: Time of Supply

    VAT applies at the earliestof the following events (the “time of supply”):

    1. When goods are supplied or the service is performed.
    2. When payment is due or received.
    3. When the invoice is issued.

    For long-term contracts such as construction or rentals, VAT is treated as supplied progressively as work continues.

    At the time of supply, the business must charge VAT to the buyer and record the transaction. This does not mean paying the VAT out of pocket immediately. Instead:

    • The VAT is collected from the buyer.
    • It is recorded as output VAT in the business’s books.
    • It is included in the monthly VAT return and remitted by the due date (following month).

    In short: time of supply = time to charge and account, not necessarily the time of remittance.

    Filing Deadlines and VAT Return Content

    • General VAT returns (under the Tax Administration Act) are due on or before the 21st of the following month.
    • A special 14-day rule in the Tax Act applies to VAT withheld or collected by appointed bodies, and to self-accounted VAT. These must be remitted on or before the 14thof the month following the transaction.

    Each VAT return must show:

    • Input Tax (Input VAT) paid in the preceding month.
    • Output Tax (Output VAT) collected in the preceding month.
    • VAT payable on all taxable supplies in that period.

    Technical and Cashflow Impacts

    • Input VAT can only be claimed once it is paid, not just invoiced.
    • Output VAT must be declared once it is collected, not merely billed.
    • Businesses must align their credit sales, purchases, and payment cycles to manage VAT efficiently. Treasury teams need proper documentation to support input VAT claims.

    Self-Accounting

    When a business receives taxable supplies without a VAT invoice, or from a non-registered supplier, it must self-account and remit the VAT directly to the Service.

    Small businesses are exempt from this rule – they neither charge VAT nor self-account.

    The Big Change: Input Tax Credits

    Under the old regime, businesses could only claim input Tax (Input VAT) on goods for resale. VAT on services and fixed assets was not claimable.

    Under the new law, input VAT on services and fixed assets is claimable if used for taxable or zero-rated activities.

    • If input VAT paid is greater than output VAT collected, the excess is carried forward as credit into future months.
    • A business may also apply for a refund by submitting the required documentation.
    • Zero rated suppliers are entitled to refunds rather than rolling over credits.
    • Input VAT must be claimed within five years
    • Input VAT cannot be claimed on exempt activities

    Reality Check for Consumers

    Even when an item is zero-rated or exempt, prices can still rise if refunds are delayed or compliance costs are high. Businesses often pass these costs forward.

    Exempt and Zero-Rated Lists

    Below is a short but complete guide drawn from the new Act.

    Exempt supplies

    No VAT is charged, and input VAT cannot be recovered on these items:

    • Oil and gas exports
    • Crude petroleum oil and feed gas for all processed gas
    • Goods purchased for use in humanitarian donor funded projects
    • Baby products
    • Locally manufactured sanitary towels, pads or tampons
    • Military hardware, arms, ammunitions and locally manufactured uniforms supplied to armed forces, para-military and other security agencies of a Nigerian government
    • Shared passenger and road transport service
    • Purchase, hire, rental or lease of tractors, ploughs and similar equipment used for agricultural purposes
    • Supplies consumed by an approved entity in export processing or free trade zones, limited to the approved activity
    • Goods or services supplied to diplomatic missions, diplomats and other recognised persons where activity is in the public interest and not for profit
    • Plays and performances conducted by educational institutions as part of learning
    • Land or building, including interest in land or building
    • Money or securities, including any interest in money or securities
    • Government licences
    • Assistive devices and disability-related products, for example hearing aids, wheelchairs and braille materials

    Zero rated supplies

    VAT applies at a 0 percent rate, and input VAT is recoverable. This includes:

    • Basic food items
    • Medical and pharmaceutical products, including medicinal herbal products
    • Educational books and materials
    • Fertilisers
    • Locally produced agricultural chemicals
    • Locally produced veterinary medicine
    • Locally produced animal feeds
    • Live cattle, goats, sheep and poultry
    • Agricultural seeds and seedlings
    • Electricity generated by GENCOs and supplied to National Grid or NBET
    • Electricity transmitted by TCN to DISCOs
    • Medical services
    • Tuition for nursery, primary, secondary or tertiary education
    • Exported goods excluding oil and gas
    • Exported services
    • Exported incorporeal property
    • Medical equipment
    • Electric vehicles
    • Parts and semi knock down units for the assembly of electric vehicles

    The zero-rated supplies list is subject to the Thirteenth Schedule to the Tax Act. The Thirteenth Schedule distinguishes between agricultural activities (exempt) and agricultural products (zero-rated). The difference matters for VAT recovery, classification, and documentation.

    Old Lists vs New Lists: What Moved

    • Previously zero-rated items included non-oil exports, diplomatic supplies, and humanitarian projects.
    • The latter two are now exempt, not zero-rated.
    • Zero-rated list coverage expanded to include several items that were previously exempt
    • Exempt list is no longer split into goods and services.
    • VAT is back on airline tickets. The old removal under the Finance Act is not included in the new law
    • Services of Microfinance Banks, Mortgage and People’s Banks also no longer exempt under the new law.

    Impact of reclassification:

    • Moving from zero-rated to exempt removes the right to input VAT recovery.
    • Moving from exempt to zero-rated allows refunds and eases costs.
    • Donor-funded projects may face higher costs under exemption.
    • Government may retain more revenue through fewer refunds, but costs may pass to consumers.

    Business Restructuring

    VAT does not apply to business restructurings carried out in line with the Act.
    When a business or part of a business is transferred as a going concern and the purchaser uses the assets in the same kind of business, the transfer is not treated as a supply for VAT purposes, provided the purchaser is registered or becomes registrable because of the transfer.

    This provides relief for qualifying reorganisations, such as mergers or transfers, and helps businesses restructure without VAT becoming an extra cost.

    Ministerial Powers

    The Minister can pause or resume VAT on key energy items (petroleum products, renewable energy, CNG, LPG) by Gazette notice. VAT on these items is currently suspended, meaning they are temporarily not subject to VAT.

    The Minister can also classify certain CNG and LPG equipment or services as exempt or zero-rated through Gazette orders. These are currently in a “to be classified” zone.

    Refunds and Administration

    Refunds are available where input VAT exceeds output VAT. Exporters and zero-rated suppliers can apply directly.

    But delays are common. When refunds drag, businesses either absorb the cost or pass it to consumers, reducing the benefit of zero-rating.

    Penalties

    The new penalty regime is tough:

    • Late filing: 10 percent per annum plus CBN interest rate.
    • Non-compliance with e-invoicing/fiscalisation: ₦1 million, daily fines, 100% of tax due plus interest.
    • Serious offences may result in fines or imprisonment.

    So, VAT: Problem or Simplicity?

    The law simplifies some areas but shifts costs in others.

    • E-invoicing and real-time reporting make compliance more structured but less flexible.
    • Input VAT on services and fixed assets is a major simplification.
    • Shifts between zero-rated and exempt significantly affect cash flow.
    • Small businesses are spared heavy compliance.
    • Refund speed will determine how much consumers benefit.
    • Government revenue may rise through reduced refunds and tighter collection.
    • Ministerial powers add flexibility but also uncertainty.

    In summary, VAT has been reloaded. The rules are clearer, technology is stricter, and classifications have shifted. Whether it feels like a challenge or simplicity depends on where you sit – government, business, or consumer.

    Download pdf here.

  • What Happens to My Salary Under the New Tax Act? (PAYE without the stress)

    What Happens to My Salary Under the New Tax Act? (PAYE without the stress)

    So you have worked hard all month, the alert finally lands, and then… wait, what happened to my money?

    Let us break down PAYE (Pay As You Earn) under the new Nigeria Tax Act in plain gist.

    1. First Things First: What Is PAYE?

    PAYE simply means your employer is the middleman for the taxman. Instead of waiting for you to calculate and pay taxes yourself, your employer deducts tax from your salary before it even hits your account and sends it straight to the government.

    So if you have ever felt your salary was short, do not fight HR, it is the law.

    2. Who Does This Affect?

    PAYE applies to almost everyone who earns a salary or regular income, including:

    • Full-time employees (9 to 5 crew)
    • Contract staff
    • Part-time staff and casual workers
    • Allowances and benefits (emoluments) are also taxable

    Basically, if it looks like salary, smells like salary, and walks like salary, the taxman will take his share.

    3. How Do They Calculate It?

    Under the new Act (as also in the current law), it is not just your basic salary that is taxed. It is your total package (emoluments):

    • Basic pay
    • Housing allowance
    • Transport allowance
    • Other perks (those “small” allowances count too)

    But do not panic, the law still gives you reliefs and exemptions before the tax bite lands.

    4. Why Does My Take-Home Pay Feel Smaller?

    Because gross pay is the fancy number HR promises. But take-home pay = gross pay minus PAYE, pension, NHF and NHIS.

    Think of gross pay as the full suya plate you ordered, and take-home as what is left after friends – PAYE, pension, NHF and NHIS, taste it before it reaches you.

    5. What Changed Under the New Act?

    • Clearer definition of emoluments, no more hiding allowances outside the tax net
    • Digital tracking with Tax IDs, your PAYE tax is now tied neatly to your Tax ID
    • Stricter employer duty, bosses must deduct and remit PAYE on time or face penalties
    • From January 2026, new rates, ₦800,000 tax-free band, CRA disappears, and a brand-new rent relief joins the long-standing list of statutory deduction

    A. Step-by-Step: How PAYE Is Calculated

    For salaries you are earning now (2025 paychecks):
    1. Add up Gross Pay (GI), basic + housing + transport + other taxable allowances
    2. Subtract allowable deductions, for example 8% employee pension, NHF, NHIS, life insurance premiums
    3. Compute CRA (Consolidated Relief Allowance), higher of ₦200,000 or 1% of GI plus 20% of (GI minus pension)
    4. Taxable Income = GI − pension − CRA
    5. Apply current PIT bands (annual):
      1. First ₦300,000 → 7%
      1. Next ₦300,000 → 11%
      1. Next ₦500,000 → 15%
      1. Next ₦500,000 → 19%
      1. Next ₦1.6m → 21%
      1. Above ₦3.2m → 24%
    6. Minimum wage earners (₦70,000/month or less) → no PAYE
    From January 2026 (new Act kicks in):
    1. Add up Gross Pay
    2. Subtract eligible deductions, these are not new, they have always been around:
      1. Pension contributions
      1. National Housing Fund (NHF) contributions
      1. National Health Insurance (NHIS) contributions
      1. Life insurance or annuity premiums (for you or your spouse)
      1. Interest on loans for building your own house
        New addition: Rent relief = 20% of rent paid (capped at ₦500,000)
    3. Taxable Income = Gross pay − deductions
    4. Apply new bands:
      1. First ₦800,000 → 0%*
      1. Next ₦2.2m → 15%
      1. Next ₦9m → 18%
      1. Next ₦13m → 21%
      2. Next ₦25m → 23%
      • Above ₦50m → 25%

     B. PAYE: 2025 vs 2026 At a Glance

    Feature2025 (Current System)From Jan 2026 (New Tax Act)
    Tax-free allowanceNational Minimum Wage earners (≤ ₦70k/month = ₦840k/year) pay 0%First ₦800,000 of annual income is 0%. Note: If your total income is ≤ ₦840,000 (minimum wage), you still pay nothing, the exemption overrides the tax table. The ₦800,000 annual income band impliedly applies only when you earn more than the current minimum wage.
    Reliefs and deductionsCRA + long-standing reliefs (pension, NHF, NHIS, life insurance, housing loan interest)Same long-standing reliefs continue + new Rent Relief (20% of rent paid, capped ₦500,000). CRA is abolished
    Bands and Rates7% → 24% (6 steps). First ₦300k = 7%, Next ₦300k = 11%, Next ₦500k = 15%, Next ₦500k = 19%, Next ₦1.6m = 21%, Above ₦3.2m = 24%0% → 25% (6 steps). First ₦800k = 0%*, Next ₦2.2m = 15%, Next ₦9m = 18%, Next ₦13m = 21%, Next ₦25m = 23%, Above ₦50m = 25%
    FocusProtects low earners, CRA reduces tax for middle-incomeSimpler, bigger 0% band, targeted reliefs (rent + long-standing ones), broader net for high earners

    6. Other Exemptions You Should Know

    The Act also says some income is completely tax-free:

    • Compensation for personal injury up to ₦50m
    • Gains from selling your main home (principal private residence + up to 1 acre of land) – once in a life time exemption.
    • Gains from selling small personal assets (like furniture, jewelry, cars) if total proceeds ≤ ₦5m in a year
    • Certain approved losses can reduce your taxable income if you are also doing business as an individual (business losses, investment losses)

    7. Do Not Forget the Global Rule

    If you are a resident of Nigeria, your worldwide income is taxable here, whether you earned it in Lagos, London, or Los Angeles. If the money is yours, Nigeria wants to know.

    8. What Should Employees Do?

    • Know your gross vs net pay, do not wait till alert day for surprises
    • Check your payslip, make sure PAYE is actually deducted and remitted
    • Keep your Tax ID handy, your PAYE is linked to it
    • Ask questions, HR must explain your deductions if you are confused

    Bottom Line

    Your salary did not shrink by magic. PAYE is the taxman’s cut, and under the new Act, it is clearer, stricter, and better tracked. The good news is that once PAYE is deducted, you are covered, no extra surprise bills on that same income.

    So next time your alert feels light, just remember: it is not HR stealing your money, it is PAYE doing its job.

    How Vi-M Professional Solutions Can Help

    We know tax can sound like wahala, but at Vi-M we make it simple. For employees, that means:

    • Clear and correct PAYE deductions on your payslip
    • No surprises with under-deductions or double deductions
    • Your Tax ID linked properly to your salary records

    Many companies already let us manage and outsource their payroll. So when Vi-M is in charge, salaries land on time, pensions and PAYE are deducted correctly, and payslips stop giving employees headaches. With Vi-M, you just enjoy your salary alert while we quietly handle the payroll and tax stress in the background.

    Download the pdf version here.

  • Surcharge Wahala: Why Fuel Just Got Pricier Under the New Tax Act

    Surcharge Wahala: Why Fuel Just Got Pricier Under the New Tax Act

    Nigerians have been asking one big question: why on earth should we pay more again whenever we buy fuel?.

    The new Nigeria Tax Act, 2025 quietly introduced something called a surcharge tax on fossil fuels. Let us unpack what this means in simple gist.

    What the Law Says

    The Act introduces a 5 percent surcharge on certain fossil fuel products. Fossil fuels here mean the regular petroleum products Nigerians depend on every day such as petrol (PMS), diesel (AGO), aviation fuel (Jet A1), fuel oil, and other mineral-based fuels used for transport and power.

    The surcharge does not wait until the very end of a transaction. The law says it becomes due as soon as one of three things happens: the fuel is supplied, it is sold, or payment is made — whichever happens first.

    In simple terms, once any of those steps takes place, the 5 percent is triggered and calculated on the retail pump price.

    This surcharge is not yet effective. It will only commence when the Minister of Finance issues an official order in the Federal Government Gazette. Until that notice is published, no surcharge applies.

    Administration and collection will be handled by the Nigeria Revenue Service (NRS), which will collect it monthly and may issue further compliance guidelines.

    What Fuels Are Exempt

    The law excludes certain products from the surcharge:
    • Clean and renewable energy (solar, wind, hydro, biomass, etc.)
    • Household kerosene
    • Cooking gas (LPG)
    • Compressed natural gas (CNG)

    Why Government Introduced It

    Government posits that this surcharge is designed as a dedicated fund for road infrastrructure and maintenance. Officials may also likely argue that this is not only about revenue. By raising the cost of petrol and diesel, the policy is meant to push households and businesses toward alternatives such as gas, kerosene, CNG, and renewable energy. It is designed to be both a revenue measure and an environmental one.

    What This Means for You

    1. Fuel will cost more once implemented. That is the first and most painful effect. Transport, logistics, and power generation all depend on fuel, so the extra 5 percent will flow into the cost of living.
    2. Inflationary pressure will rise. With most goods and services linked to transport, prices are likely to increase further.
    3. Clear policy signal. Government wants energy use to shift gradually to gas and renewables.
    4. Federal revenue only. Unlike VAT that is shared among federal, state, and local governments, this surcharge is retained at the federal level through the NRS.

    Possible Ways to Cope or Plan

    • Explore alternatives. Cooking gas, CNG, solar, and renewables are not affected. A partial or full switch can reduce the burden.
    • Improve efficiency. Transport operators and heavy fuel users can cut costs with fuel-saving vehicles, better planning, and energy-efficient equipment.
    • Corporate adjustments. Businesses may reorganise some of their energy mix toward exempt products if this is genuinely possible.

    Final Word

    The surcharge tax may feel unnecessary and painful, especially with pump prices already high. But since it is already written into law, the focus should be on understanding the rules and planning ahead. Remember: it will only take effect after the Minister of Finance issues a Gazette order. Once that happens, the Nigeria Revenue Service will administer it and all revenue will stay at the federal level.

    In the long run, the more Nigeria adopts cleaner energy, the less this surcharge will matter.

    Download the pdf version here.