The ₦25 million line every Nigerian business should watch

Below ₦25 million

A business turning over less than ₦25 million a year is treated as a small company. It does not pay company income tax and it is not required to charge VAT.

At ₦25 million and above

Three things change at once:

1. 1Company income tax applies.
2. 2You must register for VAT and begin charging 7.5% on your invoices.
3. 3You file a VAT return every month, by the 21st, covering the previous month, including months where you sold nothing.

The trap

Turnover is measured across the year, not per transaction. Businesses cross the line in month eight and only notice at year end, by which point VAT was owed on months of invoices that never charged it. That liability does not disappear; it is collected later, with penalties.

What to do

Track turnover monthly against the threshold. Rizekit's dashboard alerts you at 80% so registration happens before the line, not after it.