Under Section 202 of the Nigeria Tax Act (NTA), a “small company” is defined as one with a gross turnover of ₦50 million or less per annum and total fixed assets not exceeding ₦250 million.
However, Section 147 of the Nigeria Tax Administration Act (NTAA) defines a “small business” as one with gross turnover of ₦100 million or less per annum (and fixed assets less than ₦250 million).
Reactions and Interpretation
Taiwo Oyedele, chairman of the presidential fiscal policy & tax reforms committee, called the ₦50 million figure in the NTA an error, asserting that the “correct” threshold is ₦100 million.
A tax lawyer, Chimamanda Augustine, noted that in legal drafting, phrases like “not exceeding” and “less than” are effectively equivalent in this context.
She also said there is no meaningful difference between “small company” and “small business” in this tax-law context.
Context and Implementation Timing
The new tax reform laws (including the NTA and NTAA) have been gazetted, and their implementation is scheduled for January 1, 2026.
Given the conflict, clarity is needed before the effective date to avoid confusion by businesses and tax authorities.
Support in other commentary and analyses
Some legal reviews and commentaries (e.g. Pavestones Legal) interpret the NTA’s small company threshold as ₦100 million, aligning with the NTAA, suggesting a harmonized approach.
Tax advisory firms (e.g. Baker Tilly Nigeria) also state that the reforms provide that businesses with turnover not exceeding ₦100 million and fixed assets ₦250 million are exempt from certain taxes (CIT, CGT, etc.).
However, credible analysis of the NTA text (e.g. in EY’s tax alerts) still shows that the NTA’s wording mentions the ₦50 million threshold for “small companies.”
Legal ambiguity
The direct conflict in two new statutes complicates compliance. Businesses that fall between ₦50m and ₦100m turnover could be uncertain whether they are subject to full tax obligations or qualify for small-company relief.
Tax planning and forecasting challenges
Entrepreneurs, accountants, and tax consultants will struggle to model future tax liabilities until the discrepancy is resolved.
Regulatory and administrative conflict
Tax authorities (federal, states, etc.) may interpret the statutes differently, leading to inconsistent enforcement.
Need for clarifications or corrections
Before January 2026, amendments, corrigenda, guidance notes, or judicial interpretation may be necessary to resolve the contradiction.
Business consequences
Some businesses may underpay or overpay tax depending on the interpretation, potentially exposing them to penalties, interest, or audits.
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