Short Answer: Yes, SMEs Must Still File

A common question among Nigerian SMEs is:

“If my business pays 0% income tax, do I still need to file tax returns?”

Yes. Filing is mandatory — even when tax payable is zero.

This article explains why filing still matters, what happens if you don’t file, and how SMEs can stay compliant without stress.

Why Filing and Payment Are Two Different Things

Under Nigerian tax law, filing and payment are separate obligations.

• Filing means declaring your income, expenses, and business status
• Payment means remitting tax due (which may be ₦0)

The 0% income tax rule only affects payment, not filing.

In simple terms:

You still have to show your work — even if the final answer is zero.

What SMEs Are Expected to File

Even when your income tax rate is 0%, SMEs are generally expected to:

• File annual income tax returns
• Declare turnover and allowable expenses
• Prove eligibility for small company (SME) status

These filings are how you legally claim your 0% rate.

Without filing, the tax authority has no obligation to assume you qualify.

What Happens If an SME Does Not File

Many SMEs assume that filing is optional when no tax is due. This is one of the most common and costly mistakes.

Failure to file can result in:

• Late filing penalties
• Interest charges
• Loss of SME protections
• Estimated or presumptive assessments
• Increased likelihood of audits or enforcement actions

In many real cases, penalties are charged even when the underlying tax is zero.

The Presumptive Tax Risk

When an SME does not file returns or keep records, tax authorities may apply presumptive taxation.

This means:

• Your tax is estimated based on bank inflows or industry assumptions
• Actual expenses may be ignored
• SME reliefs may not be applied

Ironically, businesses that qualify for 0% income tax often end up paying more under presumptive assessments due to non-filing.

Filing Is Also Your Legal Protection

Filing does more than satisfy compliance rules. It creates a defensive record that shows:

• Your business is small
• Your income level is within SME thresholds
• Your operations are transparent

If questions arise later, filed returns are your first line of protection.

No filing means no evidence.

How SMEs Can File Without Stress

Filing does not require complex accounting systems. For most SMEs, it simply requires:

• Consistent bank records
• Basic income and expense tracking
• Timely submissions

The problem for most businesses is not difficulty — it is inconsistency.

Why MyFinbuk Treats Filing as a Non-Negotiable

At MyFinbuk, we assume one rule:

If it is not filed, it does not exist.

Our systems focus on:

• Ongoing readiness, not last-minute panic
• Keeping SMEs filing-ready all year
• Preventing silent non-compliance

This is how SMEs enjoy 0% income tax without attracting unwanted attention.

Key Takeaway

• 0% income tax does not remove filing obligations
• Filing is how you legally claim SME benefits
• Non-filing creates penalties and exposure
• Consistent, simple records are enough

Compliance is not about paying more tax — it is about staying in control.