Smart Tax Planning for Nigerian Businesses in 2026

Let’s first look at the major changes in 2025 and how they are important for you:

• The NTA 2025 simplifies and clarifies what kinds of expenses and allowances companies can claim when computing taxable profit.
• To deduct business expenses, the law now requires that the costs be “wholly and exclusively” incurred in producing income. That means you must keep proper documentation linking expenses to business operations.
• For capital expenditures (like buying machinery, vehicles, office furniture, etc.), you can claim what’s called a capital allowance (a tax-friendly substitute for depreciation).
• Where previous deductions might have been subjective with “reasonable” or “necessary” tests, the updated rules demand clearer proof. That’s good as it reduces grey areas.

Because of these reforms, you have a window of opportunity: those who plan with a strong sense of intentionality now can reduce their tax burden in a legal and compliant way, leaving others to scramble.

💡 Smart Tax-Planning Moves You Should Make in 2026

Here are the core strategies you can start applying today:

• Track Every Legit Expense and Document It

Expenses are deductible when they are wholly and exclusively for business. That means things like:

• Interest on business loans is used to run or grow the business.
• Rent (or lease) for business premises.
• Salaries, wages, staff costs (if you employ people).
• Repairs and maintenance of assets or premises used for business.
• Legit business costs like professional fees (accountants, auditors, legal, consultants), advertising/marketing, as long as they are tied to business income. Many tax-service providers point them out as deductible.

Why this matters now: With the stricter “wholly and exclusively” rule, you need good documentation (invoices, receipts, justification) to claim these. That means you and your clients should start (or continue) keeping clean records, digital or physical.

• Use Capital Allowances

If your business invests in long-term assets (machinery, office furniture, vehicles, buildings, etc), those don’t just sit on your balance sheet. Under the Act, you can claim a capital allowance, which reduces your taxable profits.

• The assets must be owned by the company, in use, and for business purposes.
• Depending on the asset type, there are different rates for allowance (the new Act simplifies this with uniform annual rates).
• If part of the asset generates non-taxable income (or non-business income), the allowance must be prorated, but not if non-taxable income makes up less than 10% of total income under certain conditions.

📌 What should you do: Maintain a clear, up-to-date asset register. Record when you bought the asset, at what cost, what it’s used for, and declare it properly in your tax computation. This is one of the easiest ways to legally lower taxes.