Nigeria's 2026 tax changes: what every small business owner needs to know

Most Nigerian SME owners have the same relationship with tax: avoid thinking about it as long as possible, then scramble when it becomes unavoidable.

That approach is getting harder to maintain. FIRS has been building out its digital infrastructure quietly, and 2026 brought two specific changes that matter for online sellers. This isn't legal advice — talk to an accountant for your specific situation. But here's the practical picture.

What actually changed

Two things worth paying attention to.

First, the VAT registration threshold got clarified. Annual turnover above ₦25 million means you're required to register for VAT and file monthly returns. Below that threshold, you're exempt from registration — but you're still paying VAT on purchases whether you track it or not.

Second, FIRS has been digitising its compliance infrastructure seriously. Bank transaction data, POS aggregation, and payment records from online platforms are increasingly used to cross-reference what businesses declare. If you're generating consistent income and not filing, that gap is becoming easier to spot.

What ₦25 million a year actually looks like

₦25 million sounds like a lot. It's ₦2.08 million per month.

If you're doing ₦400,000–₦500,000 a week — which isn't uncommon for sellers who've been at it a few years with good products — you're already there or close to it.

If you're at that level and haven't started thinking about VAT compliance, this is the moment.

What compliance means practically:

• •Get a Tax Identification Number (TIN) if you don't have one — it's free at any FIRS office or online at tinverification.firs.gov.ng
• •Register for VAT
• •Charge VAT at 7.5% on applicable sales
• •File monthly returns (Form 002) by the 21st of each month
• •Keep records of VAT you paid on purchases

The part most people don't know: you can recover VAT you paid

VAT is not a pure cost. It's a pass-through tax.

When you buy inventory from a VAT-registered supplier, you're paying VAT on that purchase. When you charge VAT to your customers, you collect it on FIRS's behalf. What you actually remit is the difference between the two.

Example: You paid ₦50,000 in VAT on supplier invoices this month. You collected ₦85,000 in VAT from customers. You remit ₦35,000 to FIRS — not ₦85,000.

But you can only claim the offset if you have the records. Which means getting proper invoices from suppliers and logging the VAT component. Clean expense tracking pays for itself here.

The practical setup on Myshoplet

If you're at the threshold or approaching it:

• •Go to Profile → Tax Settings in your dashboard
• •Enable VAT collection and set the rate to 7.5%
• •Your Tax Report under Finance generates a monthly breakdown — total revenue, pre-tax revenue, VAT collected, order count — as a CSV

That CSV is what you hand your accountant. No scrambling through bank statements. You walk into the conversation with clean data.

What to do based on where you are

Under ₦1 million a month — start building your records now. Get a TIN. Keep supplier invoices. Track your expenses. The threshold will be relevant before you expect it, and sellers who get there with clean records are the ones who don't panic.

Already doing ₦2 million or more a month and you haven't engaged with any of this — talk to an accountant this month. The cost of a good one is a fraction of what back taxes and penalties would be. Don't wait for FIRS to ask first.