How to Legally Pay 0% Tax in Nigeria (If You Are Smart)

The rules of the game are changing in Nigeria. By January 1, 2026, the new tax laws will take full effect. For the uninformed, this could mean losing up to 25% of your income. For the smart business owner, it could mean paying zero.

Here is the breakdown of how to prepare, escape the trap, and set yourself up for freedom.

The “Golden Ticket” Exemption

If you remember nothing else, remember this rule. It is your escape route.

“Companies with an annual turnover not exceeding ₦100 million and total fixed assets not exceeding ₦250 million are exempt from Companies Income Tax (CIT), Capital Gains Tax (CGT), and the new Development Levy.”

This is the keyword. This is how you escape it. Let me explain how.

Phase 1: Do You Even Need to Worry?

Before we proceed, check if you are already safe.

• If you earn less than ₦800,000 annually (That is roughly ₦66,000 every month). If the money entering your account every month is not beyond this figure, you don’t have to worry. You are legally exempt from Personal Income Tax.

• If you earn OVER ₦800,000 annually: You are in the danger zone. You need to prepare for either up to 25% tax (depending on your income bracket), or prepare correctly to pay 0% tax—provided your business earns less than ₦100 million annually.

Phase 2: The Strategy (How to Achieve 0% Tax)

If you fall into the category of people who need to protect their income, these are the steps you must take now.

1. Register a Limited Liability Company (LLC)

You cannot do this with a personal savings account. You need a corporate identity.

• It does not matter if you have an “actual” physical company or not; you need the legal structure.

• We can help you here: You can register your Limited Liability Company with us for ₦70,000 on express. We can also consult with you on your specific business and tax structure needs to ensure you are set up correctly.

2. Open the Right Bank Accounts

After you have gotten your LLC Certificate from us (or your agent), proceed immediately to the bank.

• Open a Corporate Account using this very LLC certificate.

• Create two sub-ledgers or internal definitions for yourself: A Sales Account and an Expenses Account.

3. Let Your Bank Statement Do the Talking

This is the secret sauce. Annually, your bank statement will be your evidence.

• Sales Account: Use this to receive all payments, salaries, contract fees, and gigs.

• Expenses Account: Transfer your monthly running costs (data, transport, marketing, operations) from your Sales account to this account.

• Spending: Only spend from the Expenses account.

By doing this, you create a clear financial trail showing that your business (the LLC) is active but falls under the ₦100 Million turnover exemption. Since you are under the threshold, your Corporate Income Tax is 0%.

Phase 3: No Room to Hide

This is the only way you can prepare for 2026. No one can hide or get to hiding. The bank has your BVN (Bank Verification Number) and your NIN (National Identity Number). The government will use the banking system to track your financial history.

If you are earning millions in your personal account without a registered business structure, you will be taxed at the highest individual rate (up to 25%). If you structure it through an LLC under the ₦100M threshold, you are legally exempt.

Verified Resources & Further Reading

• Watch the Official Breakdown: Taiwo Oyedele Explains the 2026 Tax Commencement (CNBC Africa)

• Read the Bill Details: PwC Nigeria Analysis on Small Business Exemptions

• FIRS Update: Federal Inland Revenue Service on the New Development Levy

Need to register your LLC immediately? Reply to this post or contact us to get your structure ready before the 2026 deadline.