Filing your taxes as a limited liability company (LLC) requires keeping two completely separate tax baskets in mind: State Government Taxes and Federal Government Taxes. What you were told is standard. Before your company can file its Company Income Tax (CIT) to the Federal Government, it must fulfiRead more
Filing your taxes as a limited liability company (LLC) requires keeping two completely separate tax baskets in mind: State Government Taxes and Federal Government Taxes.
What you were told is standard. Before your company can file its Company Income Tax (CIT) to the Federal Government, it must fulfill its employer and state-level tax obligations.
Part 1:
How Much Will You Pay in Taxes?
As an LLC, your tax rates depend entirely on your Annual Turnover (Total Revenue/Sales): [
i) State Government Taxes (Paid to State IRS, e.g., LIRS, FCT-IRS)
The state government does not tax your company’s profits; instead, it taxes the individuals associated with the company.
PAYE (Pay-As-You-Earn): If your company has employees (including yourself as a Director), you must deduct tax from salaries monthly and remit it. This follows a progressive scale from 7% to 24% based on individual income thresholds.
Direct Assessment / Minimum Tax: If you operate as a single-director company without a formal salary structure, the state will assess you as an individual business owner for personal income tax.
State Levies: Minor payments like Development Levies (usually ₦100 per employee annually) and Business Premises Levies.
ii) Federal Government Taxes (Paid to the Nigeria Revenue Service – NRS/FIRS)
Federal tax is charged on your company’s Net Profit (Revenue minus allowable business expenses). It is broken down by company size:
Company Size Annual Turnover Threshold Federal CIT Rate
Small Company Under ₦100 Million 0% (Exempt from CIT, but
filing is still mandatory)
Medium & Large ₦100 Million and above. 30% of Taxable Profit
Company
Note: All companies, regardless of size, are subject to Education Tax at 3% of assessable profit.
Part 2:
Step-by-Step Filing Action Plan
To clear your tax history and file correctly, follow these sequential phases:
Phase 1:
Clean Up the State Requirements
Register on the State Portal: Create an account on your State Internal Revenue Service platform (e.g., LIRS eTax for Lagos or FCTIRS for Abuja).
File Employer’s Annual Returns: Upload a schedule of all employees, their salaries, and the PAYE taxes deducted over the last year. Deadline: January 31st every year. Once state debts are cleared, apply for your personal Tax Clearance Certificate (TCC).
Phase 2:
Compute and Prepare Corporate Accounts
Draft Financial Statements: Gather your revenue, operating costs, and asset registers. Small companies can use simple signed accounts, while larger ones require audited financial statements.
Calculate the Taxable Profit: Separate your non-allowable expenses (like personal drawings) from valid business expenses to find your exact taxable profit.
Phase 3:
File to the Federal Government (NRS)
Log into the Platform: Access the official taxpayer portal (such as the NRS Rev360 portal) using your corporate Tax Identification Number (TIN).
Complete Self-Assessment: Navigate to the “Self Tax Filing” section and fill out the CIT forms using your prepared financial schedules.
Submit and Pay: Pay any calculated tax liability online via the portal and download your final electronic receipt and filing acknowledgement.
Deadline: Within 6 months of your company’s financial year-end.
Hidden Risks to Watch For
Late Penalties: Missing the federal CIT filing deadline triggers an immediate ₦100,000 fine for the first month and ₦50,000 for each subsequent month of default.
Corporate Affairs Commission (CAC): Remember that filing Tax Returns with the revenue service is completely separate from filing Annual Returns with the CAC to keep your corporate registration status active.
If your transactions are highly complex or you fall into the medium-to-large business category, it is strongly recommended to engage a licensed tax professional or chartered accountant to review your calculations before final submission.
Don't worry. A bank is only the channel you use to subscribe. It is not the one buying the shares for you. Your concern is valid, but Union Bank not appearing on the NGX broker list is not, by itself, a problem. What's really happening: When you subscribe through Union Bank, the bank does not sell yRead more
Don’t worry. A bank is only the channel you use to subscribe. It is not the one buying the shares for you.
Your concern is valid, but Union Bank not appearing on the NGX broker list is not, by itself, a problem.
What’s really happening: When you subscribe through Union Bank, the bank does not sell you the shares directly. Behind the scenes, your order is passed on to a stockbroker, and that stockbroker connects it to CSCS (the Central Securities Clearing System), where your shares are kept. Apps and POS terminals work the same way. For example, some fintech apps route orders through Chapel Hill Denham.
If you subscribe through Union Bank, don’t assume that means Union Bank will be your stockbroker after the IPO. The shares and your eventual ability to trade them are handled through the capital-market infrastructure.
Iking Ferry explained this clearly in his post on Facebook. Please do well to read it for better understanding here’s the link to the post https://www.facebook.com/share/p/1C5z2wguGt/
Thank you so much for taking time to break this down, I understood every single word like mama Ngozi and am actually printing it out so I can read it over again. I really wish someone had taught me this ten years ago I’d be in a much better spot today. Iam so grateful sir!
Thank you so much for taking time to break this down, I understood every single word like mama Ngozi and am actually printing it out so I can read it over again. I really wish someone had taught me this ten years ago I’d be in a much better spot today. Iam so grateful sir!
Optimize the 50/30/20 Budget, but given the cost of living in Nigeria, the standard 50/30/20 rule might be tough. You might need to adjust it to a 70/20/10 model: 70% (₦63,000) for Needs: Rent, food, transport, and utilities. 20% (₦18,000) for Wants & Buffer: Occasional treats or unexpected miRead more
Optimize the 50/30/20 Budget, but given the cost of living in Nigeria, the standard 50/30/20 rule might be tough. You might need to adjust it to a 70/20/10 model:
70% (₦63,000) for Needs: Rent, food, transport, and utilities.
20% (₦18,000) for Wants & Buffer: Occasional treats or unexpected minor costs.
10% (₦9,000) for Savings/Investment: This is your seed money.
Reduce Recurring Expenses
Look for “leaks” in your spending:
Bulk Buying: Buy non-perishable food items in bulk at major markets rather than retail shops.
Low-Entry Investment Options; look into these low-barrier investments:
Mutual Funds: You can start with as little as ₦5,000. These are managed by professionals and offer better returns than a regular bank account.
Fixed Income/Treasury Bills: Use fintech apps to buy fractional shares of government-backed assets.
Focus on “Income Mobility “On a ₦90k salary, your greatest investment is yourself. Use some of your “Wants” budget to take a certification course or learn a digital skill.
The post presents a false dilemma. Investing in a business and investing in the stock market serve two different functions. Building your own business is about wealth creation, it’s high risk, high reward and requires your full operational focus. Investing in stocks is about wealth management it’s lRead more
The post presents a false dilemma. Investing in a business and investing in the stock market serve two different functions. Building your own business is about wealth creation, it’s high risk, high reward and requires your full operational focus. Investing in stocks is about wealth management it’s lower risk and designed to preserve and grow capital without the daily operational headache. The real intellectual move isn’t picking one, but knowing which one fits your current capacity and risk appetite
How Do I File Annual Tax Returns for a Limited Liability Company in Nigeria?
Filing your taxes as a limited liability company (LLC) requires keeping two completely separate tax baskets in mind: State Government Taxes and Federal Government Taxes. What you were told is standard. Before your company can file its Company Income Tax (CIT) to the Federal Government, it must fulfiRead more
Filing your taxes as a limited liability company (LLC) requires keeping two completely separate tax baskets in mind: State Government Taxes and Federal Government Taxes.
What you were told is standard. Before your company can file its Company Income Tax (CIT) to the Federal Government, it must fulfill its employer and state-level tax obligations.
Part 1:
How Much Will You Pay in Taxes?
As an LLC, your tax rates depend entirely on your Annual Turnover (Total Revenue/Sales): [
i) State Government Taxes (Paid to State IRS, e.g., LIRS, FCT-IRS)
The state government does not tax your company’s profits; instead, it taxes the individuals associated with the company.
PAYE (Pay-As-You-Earn): If your company has employees (including yourself as a Director), you must deduct tax from salaries monthly and remit it. This follows a progressive scale from 7% to 24% based on individual income thresholds.
Direct Assessment / Minimum Tax: If you operate as a single-director company without a formal salary structure, the state will assess you as an individual business owner for personal income tax.
State Levies: Minor payments like Development Levies (usually ₦100 per employee annually) and Business Premises Levies.
ii) Federal Government Taxes (Paid to the Nigeria Revenue Service – NRS/FIRS)
Federal tax is charged on your company’s Net Profit (Revenue minus allowable business expenses). It is broken down by company size:
Company Size Annual Turnover Threshold Federal CIT Rate
Small Company Under ₦100 Million 0% (Exempt from CIT, but
filing is still mandatory)
Medium & Large ₦100 Million and above. 30% of Taxable Profit
Company
Note: All companies, regardless of size, are subject to Education Tax at 3% of assessable profit.
Part 2:
Step-by-Step Filing Action Plan
To clear your tax history and file correctly, follow these sequential phases:
Phase 1:
Clean Up the State Requirements
Register on the State Portal: Create an account on your State Internal Revenue Service platform (e.g., LIRS eTax for Lagos or FCTIRS for Abuja).
File Employer’s Annual Returns: Upload a schedule of all employees, their salaries, and the PAYE taxes deducted over the last year. Deadline: January 31st every year. Once state debts are cleared, apply for your personal Tax Clearance Certificate (TCC).
Phase 2:
Compute and Prepare Corporate Accounts
Draft Financial Statements: Gather your revenue, operating costs, and asset registers. Small companies can use simple signed accounts, while larger ones require audited financial statements.
Calculate the Taxable Profit: Separate your non-allowable expenses (like personal drawings) from valid business expenses to find your exact taxable profit.
Phase 3:
File to the Federal Government (NRS)
Log into the Platform: Access the official taxpayer portal (such as the NRS Rev360 portal) using your corporate Tax Identification Number (TIN).
Complete Self-Assessment: Navigate to the “Self Tax Filing” section and fill out the CIT forms using your prepared financial schedules.
Submit and Pay: Pay any calculated tax liability online via the portal and download your final electronic receipt and filing acknowledgement.
Deadline: Within 6 months of your company’s financial year-end.
Hidden Risks to Watch For
Late Penalties: Missing the federal CIT filing deadline triggers an immediate ₦100,000 fine for the first month and ₦50,000 for each subsequent month of default.
Corporate Affairs Commission (CAC): Remember that filing Tax Returns with the revenue service is completely separate from filing Annual Returns with the CAC to keep your corporate registration status active.
If your transactions are highly complex or you fall into the medium-to-large business category, it is strongly recommended to engage a licensed tax professional or chartered accountant to review your calculations before final submission.
See lessIs Union Bank an Approved Channel for the Dangote Refinery IPO?
Don't worry. A bank is only the channel you use to subscribe. It is not the one buying the shares for you. Your concern is valid, but Union Bank not appearing on the NGX broker list is not, by itself, a problem. What's really happening: When you subscribe through Union Bank, the bank does not sell yRead more
Don’t worry. A bank is only the channel you use to subscribe. It is not the one buying the shares for you.
Your concern is valid, but Union Bank not appearing on the NGX broker list is not, by itself, a problem.
What’s really happening: When you subscribe through Union Bank, the bank does not sell you the shares directly. Behind the scenes, your order is passed on to a stockbroker, and that stockbroker connects it to CSCS (the Central Securities Clearing System), where your shares are kept. Apps and POS terminals work the same way. For example, some fintech apps route orders through Chapel Hill Denham.
If you subscribe through Union Bank, don’t assume that means Union Bank will be your stockbroker after the IPO. The shares and your eventual ability to trade them are handled through the capital-market infrastructure.
Iking Ferry explained this clearly in his post on Facebook. Please do well to read it for better understanding here’s the link to the post https://www.facebook.com/share/p/1C5z2wguGt/
See lessHow can I overcome fear and hesitation in real estate investing in Nigeria?
Thank you so much for taking time to break this down, I understood every single word like mama Ngozi and am actually printing it out so I can read it over again. I really wish someone had taught me this ten years ago I’d be in a much better spot today. Iam so grateful sir!
Thank you so much for taking time to break this down, I understood every single word like mama Ngozi and am actually printing it out so I can read it over again. I really wish someone had taught me this ten years ago I’d be in a much better spot today. Iam so grateful sir!
See lessHow can I save and invest on a ₦90k salary in Nigeria?
Optimize the 50/30/20 Budget, but given the cost of living in Nigeria, the standard 50/30/20 rule might be tough. You might need to adjust it to a 70/20/10 model: 70% (₦63,000) for Needs: Rent, food, transport, and utilities. 20% (₦18,000) for Wants & Buffer: Occasional treats or unexpected miRead more
Optimize the 50/30/20 Budget, but given the cost of living in Nigeria, the standard 50/30/20 rule might be tough. You might need to adjust it to a 70/20/10 model:
See less70% (₦63,000) for Needs: Rent, food, transport, and utilities.
20% (₦18,000) for Wants & Buffer: Occasional treats or unexpected minor costs.
10% (₦9,000) for Savings/Investment: This is your seed money.
Reduce Recurring Expenses
Look for “leaks” in your spending:
Bulk Buying: Buy non-perishable food items in bulk at major markets rather than retail shops.
Low-Entry Investment Options; look into these low-barrier investments:
Mutual Funds: You can start with as little as ₦5,000. These are managed by professionals and offer better returns than a regular bank account.
Fixed Income/Treasury Bills: Use fintech apps to buy fractional shares of government-backed assets.
Focus on “Income Mobility “On a ₦90k salary, your greatest investment is yourself. Use some of your “Wants” budget to take a certification course or learn a digital skill.
Is Investing ₦1 Million in Stocks Better Than Starting a Business in Nigeria?
The post presents a false dilemma. Investing in a business and investing in the stock market serve two different functions. Building your own business is about wealth creation, it’s high risk, high reward and requires your full operational focus. Investing in stocks is about wealth management it’s lRead more
The post presents a false dilemma. Investing in a business and investing in the stock market serve two different functions. Building your own business is about wealth creation, it’s high risk, high reward and requires your full operational focus. Investing in stocks is about wealth management it’s lower risk and designed to preserve and grow capital without the daily operational headache. The real intellectual move isn’t picking one, but knowing which one fits your current capacity and risk appetite
See less