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
Under the Nigeria Tax Act 2025, effective 1 January 2026, a business must register for VAT once it is no longer a small business: turnover above ₦100 million or fixed assets above ₦250 million. Professional service providers must register whatever their size. Registration starts with your Tax ID, linked to your CAC number, and then VAT registration with the NRS.
Before 2026, many small Nigerian businesses were unsure whether they had to register for VAT at all. The Nigeria Tax Act 2025 (NTA) and the Nigeria Tax Administration Act 2025 (NTAA), both effective 1 January 2026, made the line clearer: below the small business threshold you are out, above it you are in, and professional firms are in from the start.
The threshold under the 2025 Acts
Forvis Mazars' summary of the NTA's VAT changes, published 16 March 2026, defines a small business as one with turnover of ₦100 million or less and fixed assets of ₦250 million or less. A small business is exempt from VAT registration, charging, filing and remitting. Professional service providers are excluded from the definition. BusinessDay's February 2026 explainer gives the same ₦100 million turnover line for registration and monthly filing.
| Your business | Must you register for VAT? |
|---|---|
| Turnover ₦100m or less and fixed assets ₦250m or less, not professional services | No. Exempt, but may opt in by written notice |
| Turnover above ₦100m | Yes |
| Fixed assets above ₦250m, even if turnover is lower | Yes, because both tests must be met to be small |
| Professional services (law, accounting, consultancy and similar), any size | Yes |
| Non-resident supplier of taxable goods or services to Nigeria | Yes, per the Mondaq review of the NTA |
When the obligation starts
The NTA does not give a single registration date that fits every business; it turns on when you cross the line. Treat these as the trigger points and register promptly once one applies:
- You are starting a professional services firm: register before you issue your first invoice.
- Your turnover for the year is heading past ₦100 million: monitor it monthly and register before you cross, not after the year ends.
- You buy or revalue fixed assets that take you past ₦250 million.
- You decide to opt in voluntarily, for example because big clients prefer VAT-registered suppliers or you want to reclaim input VAT.
The exact registration window and any penalty for late registration under the NTAA were not confirmed for this article. Check the NRS website or ask a tax adviser for the current rule. For filing once registered, BusinessDay reports late filing penalties of ₦50,000 for the first month and ₦25,000 for each further month, plus interest (as at Feb 2026).
Steps to register
- Get your Tax ID. From 1 January 2026, the Tax ID replaced the old TIN. For a business it is linked to its CAC registration number. On taxid.nrs.gov.ng (or taxid.jrb.gov.ng), choose the Corporate tab, pick your organisation type, enter the CAC number and select Retrieve Tax ID to see a 13-digit Tax ID, according to the FCT Internal Revenue Service notice.
- Register for VAT with the Nigeria Revenue Service (NRS). BusinessDay's February 2026 explainer names TaxPro Max as the online portal at that date; confirm the current portal and route on nrs.gov.ng before you start, as systems can change.
- Set up your invoices to carry the details NTA s.153 requires: supplier TIN, registration number, invoice number, name and address, date of supply, customer name, gross amount, VAT charged and rate.
- Charge 7.5% on taxable supplies from your registration date.
- Remit VAT by the 14th and file the return by the 21st of the following month (NTA, and NTAA s.22, as reported by Mondaq), even in months with no sales.
- If you are a large taxpayer, check e-invoicing: the NRS set 31 July 2026 for companies with turnover of ₦5bn or more to adopt its Merchant Buyer Solution, The Guardian reported.
Worked example: crossing the line mid-year
Example only. A furniture maker in Abuja sells about ₦7,000,000 a month in January to June 2026, then wins a hotel contract and sells ₦15,000,000 a month from July.
| Period | Monthly sales | Running total |
|---|---|---|
| Jan to Jun | ₦7,000,000 | ₦42,000,000 by end June |
| Jul to Sep | ₦15,000,000 | ₦87,000,000 by end September |
| Oct | ₦15,000,000 | ₦102,000,000 by end October |
The business passes ₦100m in October. A sensible owner sees it coming in September and registers then, so the hotel's invoices from October carry VAT correctly. Waiting until December would mean invoices already issued without VAT.
Three common misreadings
- "I am under ₦100m, so I can ignore tax." The VAT exemption does not remove income tax filing. NTAA s.11 requires every company to file a yearly self-assessment return whether or not tax is payable.
- "My buyer will sort out VAT." A larger buyer may self-account for VAT on your supply, but that does not register you or excuse you if you should have registered.
- "I registered years ago under the old law, so nothing changes." Check whether you now fall within the small business exemption, and decide deliberately whether to stay registered.
Where Pryme fits
A Pryme Business Account shows money in by month, which makes the ₦100m turnover check easier. The Compliance agent can flag when your running total approaches the threshold so you register on time; it prepares the alert and a person decides. See also VAT on services and VAT on digital services sold into Nigeria.
Questions people ask
What is the VAT threshold in Nigeria in 2026?
Under the Nigeria Tax Act 2025, a business with turnover of ₦100m or less and fixed assets of ₦250m or less is a small business and exempt from VAT registration, per Forvis Mazars (Mar 2026). Professional service providers are excluded.
Can a small business register for VAT voluntarily?
Yes. Forvis Mazars reports that a small business may opt out of the exemption by written notice.
Is Tax ID the same as TIN?
From 1 January 2026 the Tax ID replaced previously issued TINs. For a company it is linked to the CAC registration number and can be retrieved on taxid.nrs.gov.ng.
What is the penalty for late VAT filing in Nigeria?
BusinessDay (Feb 2026) reports ₦50,000 for the first month and ₦25,000 for each further month, plus interest. Check the NRS for the current figure.
Sources
- 2025 NTA: VAT key business changes (Forvis Mazars, 16 Mar 2026) · accessed Oct 2026
- Explainer: VAT, how and when to file yours (BusinessDay, 4 Feb 2026) · accessed Oct 2026
- Nigerian Tax ID portal goes live effective 1 January 2026 (FCT Internal Revenue Service) · accessed Oct 2026
- Examination of the VAT provisions under the Nigeria Tax Act 2025 (Mondaq, 28 May 2026) · accessed Oct 2026
- Nigeria Tax Administration Act 2025 (gazette copy) · accessed Oct 2026
- NRS sets July 31 e-invoicing deadline for large taxpayers (The Guardian, 27 Jul 2026) · 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.