The ₦100M Tax Threshold: What Nigerian Founders Must Know
Hitting ₦100M in revenue sounds like a milestone. And it is. But under Nigeria’s new tax framework, it can also …
Hitting ₦100M in revenue sounds like a milestone.
And it is.
But under Nigeria’s new tax framework, it can also be the moment your business quietly loses its tax-exempt status.
Many founders will cross the line without realizing it.
Some will cross it by mistake.
Others will cross it on paper, even when cash flow says otherwise.
This is why understanding the ₦100M tax threshold in Nigeria matters more than ever.
In this guide, we break down what the threshold really means, how the rules have changed, and how to stay compliant without slowing your growth.
What Is the ₦100M Tax Threshold in Nigeria?
The ₦100M tax threshold in Nigeria refers to the annual turnover limit under which eligible businesses may enjoy certain tax exemptions, depending on structure and sector.
In simple terms:
- Earn below ₦100M in qualifying turnover, and you may remain tax-exempt
- Cross ₦100M, and additional tax obligations can apply
The issue is not ambition.
The issue is visibility.
Under the new law, revenue is easier to track, verify, and question.
Why the New Law Makes the Threshold Riskier
Previously, many small businesses operated in a grey zone.
Today, that zone is shrinking.
Suggested read: The 2025 Finance Act: 5 Clauses That Will Change How You Do Business
The new tax framework focuses on:
- Digital income tracking
- Bank data alignment
- Cross-checking reported turnover
This means the ₦100M tax threshold in Nigeria is no longer something you notice only at year-end.
If your revenue spikes suddenly, even temporarily, the system can flag it.
5 Ways to Keep Your Tax-Exempt Status
1. Track Turnover, Not Just Profit
Many founders only track profit.
Tax authorities track turnover.
Large inflows, even with high expenses, still count toward the ₦100M limit.
If you are not watching gross revenue monthly, you are flying blind.
2. Separate Business Income From Personal Transfers
Personal transfers mistakenly recorded as revenue can push you over the threshold.
This happens more often than people admit.
Under the new system, unexplained inflows raise questions quickly.
Clean separation protects your exemption.
Suggested read: Profit Margins: Identifying Which Product Line Is Actually Making Money
3. Understand What Counts as Taxable Turnover
Not all inflows are treated equally.
Refunds, pass-through funds, and certain reimbursements may not qualify as turnover, but only if properly documented.
Poor documentation turns non-income into taxable revenue.
4. Watch Annualized Revenue, Not Just Calendar Totals
Fast-growing startups often cross ₦100M on an annualized basis without realizing it.
Three strong months can signal a higher projected turnover.
The ₦100M tax threshold in Nigeria considers patterns, not excuses.
5. Plan Before You Cross, Not After
Crossing ₦100M is not bad.
Crossing it unprepared is.
Smart founders plan compliance ahead of time so growth does not trigger panic.
Tax exemption should be intentional, not accidental.
Common Mistakes That Push Founders Over ₦100M
The most common mistakes include:
Suggested read: Stamp Duty on Electronic Transfers in Nigeria: What Businesses Must Know
- Counting personal loans as revenue
- Recording gross client funds instead of commissions
- Poor invoice classification
- Late reconciliation of bank statements
- Guessing turnover instead of tracking it
Each mistake weakens your position under the ₦100M tax threshold in Nigeria.
How Smart Founders Track Revenue the Right Way
Founders who stay compliant do not rely on memory or spreadsheets alone.
They:
- Track income in real time
- Categorize inflows correctly
- Review revenue monthly
- Prepare for threshold changes early
This is where modern financial tools matter.
Platforms like Zaccheus, an AI CFO for founders, help businesses monitor turnover, forecast tax exposure, and stay compliant without hiring a finance team.
Frequently Asked Questions
What happens if my business crosses the ₦100M tax threshold?
Once you cross the threshold, additional tax obligations may apply. Failing to adjust quickly can result in penalties or backdated assessments.
Is the ₦100M threshold based on profit or revenue?
It is based on turnover, not profit. High expenses do not reduce the threshold calculation.
Can poor record-keeping affect my tax-exempt status?
Yes. Unclear records can cause non-taxable inflows to be treated as taxable revenue.
Does the threshold apply to startups and freelancers?
Yes. Startups, SMEs, and freelancers earning qualifying income are affected.
How can I avoid crossing the threshold accidentally?
Track revenue monthly, separate finances, and use tools that monitor turnover in real time.
Suggested read: Founder Salary: How to Pay Yourself Legally (and Tax-Efficiently)
Conclusion: Growth Is Good, Surprises Are Not
The ₦100M tax threshold in Nigeria is not a punishment for success.
It is a line that demands awareness.
Founders who track revenue clearly stay in control.
Those who guess lose exemptions without realizing it.
If growth is coming, preparation must come first.
Call to Action
If you want to track revenue, forecast tax exposure, and protect your tax-exempt status effortlessly, explore Zaccheus, the AI CFO built for Nigerian founders who want clarity without confusion.
