This Is How You’ll Survive Business Taxes In Nigeria
Business taxes can be overwhelming. Use our simple checklist to sort them out.
Building a business is hard, but have you considered that dealing with taxes might be harder?
Nobody likes taxes, not even 9-to-5 workers, but as a business owner in Nigeria, it’s important that you sort out your taxes to minimise your tax liability and maximise your profits.
If you’re worried about drowning in taxes, we put together a checklist to help you survive. Here’s a quick look at deductible expenses, tracking your financial books and filling your tax returns on time.
1. Deduct eligible business expenses.
The first thing you need to do is figure out how much of your business expenses are deductible. In simple terms, it is running a check on how much you are using to keep your business alive, for instance, rent salaries and wages, travel expenses, professional fees, supplies e.t.c.
The Nigerian taxation system provides for various deductions that help reduce your taxable income. So make sure each expense is accounted for, including the amount paid and the description that shows what the amount was used for. You can include the littlest things, even if it’s an expense for a trip to a client meeting.
2. File tax returns on time.
Do you know that filing your tax returns late attracts a penalty of ₦25,000 for the first month? We know that doing taxes can be such a chore, but don’t wait until your taxes are due before you file them. In Nigeria, the tax returns are filed six months after the end of your financial year. It’s a good idea to give yourself a headstart-know the tax deadline, add reminders to your calendar and schedule check-ins to organise your finances and calculate your tax returns in advance of the filing.
3. Track your finances and balance your books.
Putting your finances in order isn’t optional. If you use Kuda Business, you can easily get your account statement from the app and track all payables and receivables with the invoicing feature. Whether you use a spreadsheet or an accounting software, remember to track all your expenses and account for every item.
4. Hire a tax professional.
If you haven’t hired a tax professional yet, you should because getting an informed opinion doesn’t hurt.
Nigeria’s tax laws change, and keeping up with those changes can help you take advantage of new opportunities to reduce your tax liability. Consulting a tax professional is a good way to stay up to date and get answers to your questions about your depreciating assets, deductions, refunds, or payments.
You’re ready to file your taxes. We hope preparing for your taxes now can save you time and money, and preserve your sanity.
Take care! 💜
