Nigerian tax law is detailed, frequently updated, and easy to misread. Lex is the fastest way to get a plain-English answer: any time, at no cost.
Lex is Lucrive's AI-powered tax assistant. It is trained on Nigerian tax legislation (including the Nigeria Tax Act 2025, the Nigeria Revenue Service (NRS) Establishment Act 2025, and supporting regulations) and gives you plain-English answers to questions about your specific business situation.
You ask a question. Lex reads the relevant law and gives you an answer in plain English. No waiting for a callback. No hourly billing. No scheduled appointment.
Lex is available on all Lucrive plans. Free accounts get up to 10 questions every 30 days. Professional and Enterprise plans have no monthly cap.
Lex tells you what the law says. A tax professional tells you what to do about it. Both are valuable. Lex is free and instant. A tax professional carries liability for their advice. Use both.
This distinction matters. Lex is an information tool. When Lex tells you the withholding tax (WHT) rate on consultancy fees is 5% for a resident with a TIN, that is accurate information drawn from Nigerian tax law. What Lex cannot tell you is whether your specific contract qualifies as construction, whether your company has filing arrears that change your priority, or how to negotiate a tax dispute with the NRS.
Use Lex to understand the rules. Use a tax professional to apply them to your specific situation with accountability behind the advice.
If your answer came from a blog post written before January 2026, check it with Lex: the tax reform changed a lot.
Until 2025, the tax authority was called the Federal Inland Revenue Service (FIRS). Under the Nigeria Revenue Service Establishment Act 2025, part of the wider tax reform package that came into effect in 2026, the agency was renamed the Nigeria Revenue Service (NRS).
The name change is not cosmetic. The 2025 reform legislation updated the agency's mandate, collection powers, and the rates and thresholds for several tax types. In plain terms:
When you search older materials or ask colleagues, you may see references to "NRS." That is the same body. But the rules they are enforcing have been updated. When in doubt, ask Lex: it is trained on the 2025 legislation, not the old rules.
Lex covers all the major Nigerian business taxes. Here is what each abbreviation means:
VAT (Value Added Tax): a consumption tax charged on goods and services at the point of sale. Businesses must register unless they pass all three small-business tests (turnover of ₦100 million or less, fixed assets of ₦250 million or less, and no professional services), then charge VAT to customers and remit it to the NRS.
WHT (Withholding Tax): a tax deducted at source by the person making a payment, before the money reaches you. If a company pays you for a service, they deduct WHT from your invoice and remit it directly to the NRS. You can recover it as a credit when you file your annual return.
PAYE (Pay As You Earn): income tax deducted from employee salaries. As the employer, you deduct PAYE each month and remit it to the relevant State Internal Revenue Service. PAYE is not remitted to the NRS: it goes to the state where your employee works.
CIT (Companies Income Tax): the annual tax on the profits of a company incorporated in Nigeria. Sole proprietors do not pay CIT; they pay Personal Income Tax (PIT) instead. CIT rates vary by company size, with small companies qualifying for reduced or zero rates under the 2025 rules.
① Ask about your specific situation, not general rules
Instead of: "What is VAT?"
Ask: "I run a graphic design studio in Lagos. My revenue this year was ₦18 million. Do I need to register for VAT?"
The more context you give Lex, the more directly applicable the answer will be.
② Follow up when the answer raises more questions
Lex holds context across a conversation. If it says "WHT applies at 5% for management consultancy services," you can follow up with: "What if I provide both consulting and training in the same engagement: does the rate change?"
③ Use it to prepare before meeting your accountant
Fifteen minutes with Lex before a meeting with your accountant means you arrive understanding the basics. That makes the conversation more productive and, in many cases, shorter, which saves you money.
④ Check old assumptions
If you have been doing something a certain way for years because someone told you that was the rule, ask Lex to confirm. Tax law changed significantly in 2025. Some things people treated as settled are no longer current.
Practical tip: Keep a running note of questions you plan to ask Lex. Nigerian business owners often have tax questions in the middle of a client meeting, a price negotiation, or a bank loan application. Write them down. Ask them in a batch.
Business owner: I run a haulage company. My corporate clients keep deducting 5% from my invoices before they pay me. Is this correct and what do I do with those deductions?
Lex: What your clients are deducting is Withholding Tax (WHT). Haulage is not listed separately in the First Schedule of the Withholding Regulations 2024, so it falls under "any other services": 2% for a resident supplier with a TIN. A 5% deduction suggests your clients are treating it as a professional or technical fee, or that they do not have your TIN (without a TIN the 2% doubles to 4%). Ask them which category they used and send them your TIN.
Those deductions are not lost money. They become tax credits in your name. When you file your annual Companies Income Tax (CIT) return, you can offset those WHT credits against your tax liability. If your credits exceed what you owe, you can apply for a refund or carry the balance forward.
To claim these credits, you need a WHT receipt from each client showing the amount deducted and remitted. Start asking your clients for these documents now if you do not have them already.
Business owner: I own a women's clothing boutique in Lekki. My revenue last year was about ₦22 million. Do I need to register for VAT?
Lex: A business is exempt from VAT registration only if it is a small business: turnover of ₦100 million or less, fixed assets of ₦250 million or less, and no professional services. At ₦22 million your turnover is well under the limit. Whether you are exempt depends on your fixed assets and on whether your business is a professional-services business.
However, a few things to note:
First, if your revenue grows above ₦100 million, registration becomes mandatory.
Second, a qualifying small business may opt in to VAT registration by written notice. Some businesses do this because it makes them eligible to recover VAT on purchases from their suppliers, which can reduce costs.
Third, if you sell to VAT-registered corporate clients, some of them may prefer to buy from VAT-registered suppliers for their own input tax recovery. That is worth considering as your client base grows.
Would you like to know more about voluntary VAT registration or the filing requirements when you do register?
Business owner: I am a freelance IT consultant. Some clients deduct 5% WHT (Withholding Tax) from my invoices and others deduct 10%. Which is correct?
Lex: Under the First Schedule of the Withholding Regulations 2024, WHT on consultancy, technical and professional fees is 5% for a resident supplier with a TIN, whether you are a company or an individual. So 5% is correct for IT consulting.
10% applies only if you are not resident in Nigeria or if the client does not have your TIN, because the rate doubles where the supplier has no TIN. If a client is deducting 10%, send them your TIN and ask them to apply 5% from now on.
If you are registered as a company, the WHT deducted is a credit against your CIT (Companies Income Tax) liability. If you operate as a sole proprietor, it is a credit against your Personal Income Tax (PIT). Either way, collect the WHT receipts from your clients: you will need them at annual filing.
Business owner: I just hired my first employee, a full-time admin person. Her salary is ₦120,000 per month. Do I need to deduct anything from her pay?
Lex: Yes, as an employer, you are required to operate PAYE (Pay As You Earn) from the first month you pay an employee.
Here is what that means in practice:
① You calculate the PAYE due on her monthly salary using the Nigeria Tax Act 2025 bands, applied to her chargeable income: gross pay minus allowed deductions such as her 8% pension contribution and rent relief. At ₦120,000 per month (₦1.44 million per year), with only the pension deducted, her chargeable income is ₦1,324,800: the first ₦800,000 is taxed at 0% and the rest at 15%, about ₦6,560 a month.
② You deduct the PAYE from her gross salary before you pay her. She receives the net amount.
③ You remit the deducted PAYE to your State Internal Revenue Service, not to the NRS, by the 10th of the following month.
④ You file a monthly PAYE return and an annual employer's return (Form H1) at year-end.
One important clarification: PAYE is remitted to the state, not the federal government. The relevant state is where your employee performs the work, in most cases, the state where your office is located.
Would you like help understanding how to calculate the actual PAYE amount, or how to set up your employer registration with the state tax authority?
Most Nigerian business owners cannot afford to call a tax consultant every time a question comes up. A one-hour consultation in Lagos costs between ₦15,000 and ₦50,000 depending on the firm. Most small questions are not worth that cost.
The result is that business owners guess, and often guess wrong. They overcharge VAT. They miss registration thresholds. They file the wrong return. They pay penalties that were avoidable.
Lex closes that gap. It is not a replacement for professional advice when the stakes are high. But for the daily questions (the ones that come up during a quote, a client conversation, or a late-night review of your accounts) Lex gives you the answer in seconds.
Lex is available on all Lucrive plans. Free accounts get up to 10 questions every 30 days: enough to get answers to your most pressing tax questions. Professional and Enterprise plans have no monthly limit.
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Sources & further reading
Tags: Lex tax chatbot Nigeria, Nigerian tax questions, VAT Nigeria 2026, withholding tax Nigeria, PAYE Nigeria, NRS Nigeria Revenue Service, Lucrive AI
People and businesses in our examples are illustrative, not real Lucrive customers. Figures are worked examples: confirm your own position with a qualified tax adviser.