Small Business Tax Health Check

For small and medium enterprises (SMEs), tax management is often postponed until a formal notice arrives from the revenue service. However, waiting for an audit letter is the costliest way to handle tax compliance.

Conducting a regular internal tax health check helps founders identify and resolve vulnerabilities before they crystallize into heavy fines.

1. Commingling Personal and Corporate Funds

When founders use corporate bank accounts for personal domestic purchases, it becomes difficult during an audit to defend legitimate business deductions. Keep corporate accounts strictly dedicated to corporate commerce.

2. Inconsistent Monthly PAYE Deductions

Failing to deduct and remit Pay-As-You-Earn (PAYE) taxes on employee compensation (including allowances and bonuses) to the State Internal Revenue Service creates severe cumulative liability.

3. Missing Withholding Tax Credit Notes

If your clients deduct WHT from your invoices but you never request or track the electronic credit notes, you are forfeiting tax credits that could reduce your annual CIT obligations.

4. Neglecting Annual Returns Deadlines

Even if a business records zero revenue or incurs a loss during a financial year, filing an annual corporate return remains mandatory. A "nil" return must be submitted on time to maintain compliant status.

Summary Action Plan

1. Schedule a quarterly review with a qualified tax professional.

2. Maintain digital archives of all commercial invoices and bank statements for at least 6 years.

3. Register for official online revenue portals to monitor your assessment standing directly.

Mubarak Aminu

·Founder & Tax Consultant

Mubarak Aminu is the founder of The Tax Cup and of MLAZ Limited. A tax consultant with 3+ years' experience in PAYE, VAT and audit support, and an ICAN finalist, he explains Nigerian tax in plain language.

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