June is over. Your 2027 tax prep starts now

About this time, many, if not all, of you must have completed and filed your 2025 financials. It is usually a tedious and stressful process for most companies, especially SMEs balancing running the business with meeting compliance requirements. So I understand that many would like to take time to catch their breath after such a demanding experience. But don't!
If anything, this is the best time to start preparing for the next audit, so that it is less stressful than the recently completed one.

Some tips to get you started:

1. Don't wait until Q1 2027 to start reconciling

The difference between companies that get hit with penalties and those that don't isn't knowledge but systems. If you maintain monthly records of income, expenses, and tax deductions throughout the year, filing at deadline is just submitting what you already have. If you scramble to gather 12 months of records in June, you'll always be late. The practical step here is to close the books monthly rather than letting transactions pile up, and to keep a live folder of supporting documentation throughout the year.

2. Understand the new tax reform landscape

The Tax Reform Acts, effective from January 1, 2026, have fundamentally reshaped how small businesses approach taxation — for the first time offering genuine relief for small enterprises while demanding greater transparency from everyone. Specifically, the Nigeria Tax Act 2025 introduced a full CIT exemption for companies with annual turnover below ₦100 million, replacing the previous ₦25 million threshold, which benefits over 90% of Nigerian SMEs. SMEs should confirm whether they qualify and what this changes about their obligations.

3. Prepare for monthly estimated tax payments

One of the changes that catches businesses off guard under the new regime is that companies must now pay estimated tax monthly instead of once a year, with the first payment due by the end of month three of the accounting year. This means cash flow planning needs to account for tax as a recurring monthly obligation, not an annual event.

4. Get ahead of e-invoicing

This is the biggest structural shift on the horizon. Smaller or emerging taxpayers, defined as businesses earning below ₦1 billion annually, have more time — their engagement phase starts in January 2027, with a full go-live date scheduled for July 1, 2027, and enforcement activities expected to start in early 2028. However, the time to prepare is now. The NRS e-invoicing framework requires businesses to transmit invoices through the Merchant Buyer Solution (MBS) platform, where each transaction is validated and assigned an Invoice Reference Number that serves as proof of compliance. Buyers transacting with non-compliant suppliers may be unable to claim VAT input credit on those transactions, which means that even SMEs below the current threshold could lose business if their larger clients start demanding NRS-validated invoices.

5. Set up a proper payroll compliance rhythm

PAYE is due on the 10th of every month, and VAT and WHT are due on the 21st. The dates don't change. Many SMEs manage these reactively and incur avoidable penalties as a result. The fix is simple: automate reminders two to three days before each date and ensure reconciliations are done before the deadline rather than on the day.

6. Unify the TIN and bank account records

The reforms introduce a unified Taxpayer Identification Number (TIN) system linked to bank accounts, pension records, and insurance accounts, alongside tighter payroll reporting obligations for employers. SMEs should verify that their TIN is correctly linked and that all employee records are consistent across payroll, pension, and tax filings before the NRS's AI-driven cross-referencing flags discrepancies.