The 4% presumptive turnover tax.
Presumptive tax
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Rate applied
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Net after tax
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When the 4 percent charge bites
Presumptive tax is a backstop, not a regime you opt into. It exists for the awkward situations where the revenue service can see that a person earned money from Nigeria but cannot pin down the actual profit, and where no withholding tax has already been deducted from the payments. In that gap the law presumes a tax based on turnover instead of profit. This calculator applies the rate the rules currently set, 4 percent of the total income derived from Nigeria, and shows both the charge and what is left after it. Because this is a federal charge, the FIRS, now the Nigeria Revenue Service under the 2025 Act, is the body to confirm the rate and the conditions with, and for an individual taxpayer your state internal revenue service will also be involved in your wider assessment.
The single input is your total income from Nigeria. The default of NGN 20 million is just a starting point. Enter the figure the authority would assess, which for presumptive purposes is closer to your gross receipts than to a carefully computed profit, since the whole reason presumptive tax is being used is that a reliable profit number is not available.
Turnover, not profit, is the base
This is the feature that catches people out, so it is worth dwelling on. Ordinary income tax falls on profit, your receipts after deductible expenses. Presumptive tax ignores expenses entirely and applies its rate to the top-line income. A trader with thin margins can therefore face a presumptive charge that looks small as a percentage but is heavy relative to actual profit. The 4 percent figure here is the rate the calculator applies under the 2025 reform that took effect in 2026, and you should treat it as that rather than a number I am certifying, because reform-era figures and conditions are still settling. Verify the current position with the FIRS before relying on it.
The mechanism itself is deliberately simple, which is the point of a presumptive charge. There are no bands, no reliefs, and no schedule to work through. You multiply the assessed income by the rate and that is the tax. The simplicity is what makes it usable where records are missing, but it is also why it can be unkind to low-margin businesses.
A NGN 20 million example
Take the default income of NGN 20 million derived from Nigeria. At the rate this calculator applies, 4 percent, the presumptive tax is NGN 800,000, leaving NGN 19.2 million after the charge. The calculation does not change with your costs, your sector, or your other income. It is a flat slice off the assessed total.
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How to get off presumptive tax
The honest advice for most businesses is to make presumptive tax irrelevant by keeping records good enough for a normal assessment. If you can show your real income and expenses, you are taxed on profit under the ordinary rules, which is usually fairer once margins are taken into account. Registering for a taxpayer identification number, issuing receipts, and keeping a simple book of sales and costs are the steps that move you out of the presumptive net. A common mistake is to treat presumptive tax as a permanent shortcut. It is meant to be a fallback, and a business that grows while staying on it can end up paying more than it should. Use this tool to size the likely charge, then weigh that against the modest effort of proper bookkeeping.
Does withholding tax already paid reduce my presumptive charge?
Presumptive tax only applies in the first place where no withholding tax has been deducted from the relevant income. If WHT was withheld at source, that income is generally outside the presumptive route, so the charge should not arise on it. Where your situation is mixed, ask the FIRS how the two interact for your specific receipts.
Is presumptive tax the same as the small-company exemption?
No. They are separate ideas. Small companies below the turnover threshold face a zero companies income tax rate, which is a deliberate relief. Presumptive tax is a fallback charge used when income cannot be ascertained. A small company with proper records would normally be assessed under the company rules rather than presumptively. Confirm which applies to you with the FIRS or your state revenue service.