AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
A business name is not a separate company, so its profit is your personal income and is taxed by the internal revenue service of the state where you live (the Nigeria Revenue Service if you live in the FCT). You file a return within 90 days of the end of the calendar year, so by 31 March, and pay at the 2026 rates: 0 per cent on the first ₦800,000 of taxable income, then rising bands from 15 per cent. The CAC annual return for a business name is separate and due by 30 June.
Why it is personal income tax
When you register a business name with the CAC, you are registering a trading name for yourself (or for partners), not creating a company. The business has no tax position of its own: its profit is added to any other income you have and taxed as yours. That is the key difference from a limited company, which pays company income tax and files its own return. Our guide to business name or limited company compares the two.
Who you pay
PwC's summary of Nigerian individual tax administration (reviewed May 2026) says the relevant state internal revenue service collects tax on the income of individuals, with exceptions handled federally, including residents of the Federal Capital Territory and non-residents with Nigerian income. The federal role now sits with the Nigeria Revenue Service (NRS), which replaced FIRS. So:
- Live in Lagos: Lagos State Internal Revenue Service (LIRS).
- Live in Rivers: Rivers State Internal Revenue Service (RIRS).
- Live in the FCT: the NRS.
- Live in another state: that state's internal revenue service.
It is where you live that matters, not where the shop is. See which tax office is yours.
If you have moved state
Residence is assessed for the tax year, so if you moved from Ogun to Lagos during the year, ask both offices which one assesses you before filing. Partners in a business name are each taxed on their own share of the profit, by the state where each of them lives, so two partners may file with two different offices for the same business. Agree the profit split in writing so each share is clear.
Your Tax ID
Under the Nigeria Tax Administration Act 2025, anyone carrying on a trade or business must register for a Tax ID. Premium Times' explainer (November 2025) says an individual's NIN serves as the Tax ID and an existing TIN stays valid, and registration is free. Banks must ask taxable persons for their Tax ID.
When to file and pay
The individual tax year runs from 1 January to 31 December, and PwC says returns are due within 90 days of its end, which is 31 March. Late filing under section 101 of the 2025 Administration Act costs ₦100,000 for the first month and ₦50,000 for each further month. Check your state's portal for how to file and pay; LIRS, for example, uses its eTax portal.
Worked example: tax on ₦4 million profit
| Slice of taxable income | Rate | Tax |
|---|---|---|
| First ₦800,000 | 0% | ₦0 |
| Next ₦2,200,000 | 15% | ₦330,000 |
| Remaining ₦1,000,000 (of the next ₦9 million band) | 18% | ₦180,000 |
| Total on ₦4,000,000 | ₦510,000 |
That is an average of 12.75 per cent. If you also earn a salary, your employer's PAYE covers that income, and your return brings everything together. The Nigeria Tax Act 2025 allows rent relief of 20 per cent of rent paid, capped at ₦500,000, as DLA Piper summarises; claim it on your return with evidence.
Working out the profit
Taxable profit is what the business earned minus the costs of earning it. Keep:
- A record of every sale, with receipts or invoices.
- Receipts for stock, rent, transport, wages and other business costs.
- Separate business and personal spending, ideally in separate accounts.
- Records for at least six years after the year of assessment (section 31 of the 2025 Administration Act).
Money you take out for yourself is not a business cost; it is your share of the profit. Our guide on how sole traders pay tax covers deductible costs in more detail.
Steps to file
- Confirm your Tax ID (your NIN for most individuals) and register on your state IRS portal.
- Draw up the year's income and costs for the business, and add any other income.
- Complete the self-assessment return on the portal or at a tax office before 31 March.
- Pay the tax through the official channel the portal gives you, and keep the receipt.
- Ask for a tax clearance certificate once paid, since banks and contract tenders often request it.
The CAC return is separate
Business names also file an annual return with the CAC. PwC's CAMA compliance guide says it is due by 30 June each year, with a statement of accounts. It is a company-law filing, not a tax return, and missing it is a separate problem. If turnover is ₦100 million or less, you are a small business for VAT and exempt from charging and filing it, per Forvis Mazars, unless you provide professional services.
Where Pryme fits
Running the business through its own Pryme account keeps business and personal money apart, which makes the profit figure easier to prove. The Personal Assistant on a Personal Account can remind you of the 31 March deadline, and nothing is paid without your approval.
Questions people ask
How is a business name taxed in Nigeria?
Its profit is the owner's personal income, taxed by the state internal revenue service where the owner lives, or the NRS for FCT residents.
When is the deadline for personal income tax returns in Nigeria?
Within 90 days of the end of the calendar year, so by 31 March, according to PwC's summary.
Do I pay tax to the state where my shop is or where I live?
Individuals pay to the state where they are resident, so normally where you live, not where the shop is.
Is the CAC annual return for business names the same as a tax return?
No. The CAC return is due by 30 June and is a company-law filing. Your tax return goes to your state IRS by 31 March.
Sources
- PwC Worldwide Tax Summaries: Nigeria individual tax administration · accessed Oct 2026
- FAQs on payroll taxes and employer liability (DLA Piper Africa) · accessed Oct 2026
- Explainer on the Nigeria Tax Administration Act: Tax ID registration (AllAfrica, Premium Times) · accessed Oct 2026
- Nigeria Tax Administration Act 2025 (gazette copy) · accessed Oct 2026
- Key compliance obligations under CAMA 2020 and CR 2021 (PwC Nigeria) · accessed Oct 2026
- Nigeria's tax reform in focus: 2025 NTA VAT key business changes (Forvis Mazars) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.