Nigerian manufacturing manager using a tablet to monitor production floor.

From Factory Floor to Front Door: Scaling Your Manufacturing & Distribution Business

Leave a Comment / Compliance Audits, Automation, HRM Transformation, Inventory / Damilola Babatunde

The journey from a raw material pallet to a satisfied customer’s doorstep is more than just a logistical challenge; it’s a data race. In a market as dynamic as Nigeria’s, the winners aren’t just the ones who make the best products; they are the leaders who know their exact margins at every single stage of the process. At Excellium Business Limited, we’ve spent over 10 years helping businesses move from “surviving the day” to “leading the industry.” Whether you are managing a high-output production line in Port Harcourt or a complex distribution hub in Lagos, here is how Sage ERP transforms your operations into a high-performance engine. The Challenge: Why “Good Enough” Records are Costly In Nigeria, logistics and production costs can account for up to 70% of a product’s final price. Any blind spot in your supply chain isn’t just an inconvenience; it’s a direct leak in your profit margins. While the administrative landscape has shifted with the Nigeria Revenue Service (NRS) now requiring digital transparency, the real risk isn’t just a fine. The real risk is being unable to pivot when costs change. To grow in this environment, you need a system that tracks every “Production Recipe” (BOM) and every “Landed Cost” in real-time, ensuring you stay profitable even when the market isn’t. 5 Ways Sage Powers High-Performance Manufacturing & Distribution 1. Master Your “Production Recipe” (Bill of Materials) The Bill of Materials (BOM) is the blueprint for your finished goods. Sage ERP allows you to track every ingredient from raw materials and packaging to labor and freight costs. The Benefit: You gain total “Cost-to-Make” clarity. If the price of raw materials or fuel spikes, Sage allows you to adjust your pricing immediately, ensuring you never inadvertently sell at a loss. 2. Smart Stock Planning (MRP) Material Requirements Planning (MRP) is your “Stock Intelligence Tool.” It synchronizes your current orders with your production capacity to tell you exactly what to buy and when to buy it. The Benefit: You eliminate the “Stock-Out Trap.” You avoid tying up precious cash in Dead Stock (items that won’t move) while ensuring you never have to tell a major customer, “We’re out of stock.” 3. Real-Time “Landed Cost” Tracking In Nigeria, the supplier’s invoice is only half the story. You have to factor in customs clearing, haulage, and the fluctuating Naira valuation before a product even hits your shelf. The Benefit: Sage automatically calculates the Landed Cost of your goods. This provides a 360-degree view of your true profit per item, helping you identify and plug “money leaks” in your logistics chain. 4. Shop Floor Control with Mobile Access Modern manufacturing happens on the move. Your warehouse team can scan barcodes and update stock levels using tablets, while plant managers monitor machine efficiency directly from their smartphones. Benefit: Instant synchronization. If a production line in Kano completes a batch, your sales team in Lagos sees it available for sale on their dashboards instantly. 5. Seamless NRS Compliance & E-Invoicing Under the NRSMBS mandate, every B2B invoice must be validated by the NRS server. This is no longer a manual task you can “catch up on” at the end of the month. The Benefit: Sage features certified connectors that submit your invoices for validation automatically. Your delivery trucks stay on the road moving goods, rather than idling at the gate waiting for tax paperwork. Why Excellium is the Partner of Choice Software alone is just a tool; implementation is the engine of success. At Excellium Business Limited, we specialize in the “real world” of Nigerian manufacturing: Industry Expertise: We understand the unique “edge cases,” from managing power-backup logistics to multi-warehouse stock transfers across state lines. Data Integrity: We don’t just migrate data; we audit and cleanse it to ensure your records are accurate from day one. End-to-End Support: Whether you need Sage 300cloud for large-scale operations or Sage 200 Evolution for a growing SME, we provide localized support across all parts of Nigerian and beyond. Ready to Modernize Your Operations? Don’t wait for a manual count error or a compliance audit to tell you that your system is outdated. The businesses leading the Nigerian market in 2026 are those building their “digital brain” today. Take the next step with Excellium: Book a Free Scoping Session: Let our consultants audit your current production workflow and identify your biggest “money leaks.” Request a Live Demo: See exactly how Sage handles your specific Bill of Materials (BOM) and Landed Cost challenges. Get Started with Excellium

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12 Types of Non-Taxable Income in Nigeria (New 2026 Tax Law Updates)

Leave a Comment / Compliance Audits, Excellium Blog, Tax Acts 2026 / Damilola Babatunde

This is a question most Nigerian taxpayers can’t answer with confidence: Which parts of my income are legally tax-free? If you’re unsure, you’re not alone. Thousands of Nigerians overpay their taxes every year simply because they are unaware of legal exemptions. This often leads to financial losses caused by incorrect payroll configurations that mistakenly tax-exempt income. Understanding tax-free income isn’t about finding loopholes—it’s about knowing your legal rights under Nigeria’s tax laws. With the landmark 2025 tax reforms set to take effect in January 2026, this knowledge has never been more valuable. On June 26, 2025, the President of Nigeria signed four new tax reform bills into law, which are considered the most significant overhaul of the country’s tax structure since 1999. These reforms will fundamentally reshape taxation starting January 2026. Your Complete Guide to Tax-Free Income in Nigeria Earnings Below ₦800,000: The New Freedom Threshold From January 2026, if your annual gross income is ₦800,000 or less, you owe no personal income tax. The new progressive tax regime provides significant relief to low-income earners, while higher-income earners will be taxed at a higher rate. This translates to roughly ₦66,667 monthly. For entry-level employees, small business owners, traders, and freelancers operating at this level, tax season becomes significantly simpler. Current provision: Those earning only the minimum wage (₦70,000 monthly) are currently exempt. Retirement Gratuities: Your Lifetime of Work, Protected Gratuities are specifically exempted from PITA and are listed among tax-exempt items under Nigerian law. This includes properly approved lump-sum payments received upon retirement and end-of-service benefits from your employer. The rationale is clear: these payments represent your lifetime of service and should remain intact to support your retirement years. No percentages, no deductions, no exceptions. Also exempt: National Pension Scheme contributions deducted from your salary are not subject to personal income tax. Compensation Payments: Protection When You Need It Most When employment ends unexpectedly or injury occurs, Nigerian law protects you. The exemption threshold for compensation for loss of employment will increase from ₦10,000,000 to ₦50,000,000 under the new tax reforms. This provision recognizes that such payments aren’t income—they’re compensation for loss or harm. Whether you’re laid off, restructured out, or receive settlement for workplace injury, amounts up to this threshold remain untouched by taxation. Foreign Income Remittances: Bringing Money Home Without Penalty This exemption is particularly valuable for encouraging the repatriation of foreign currency. The new tax laws retain and clarify key exemptions for investment income and foreign-earned income brought into Nigeria. What is Exempt from Nigerian Tax: Investment Income Repatriation (for Nigerian Residents): Dividends, interest, rent, or royalties earned abroad and repatriated into Nigeria through government-approved banking channels. This is an exemption from the general rule that Nigerian residents are taxed on their worldwide income. Export Proceeds: Dividends received from wholly export-oriented businesses are exempt. Profits of any Nigerian company in respect of exported goods or services are exempt, provided the proceeds are repatriated through official channels. Government Bonds: The exemption for income earned from Federal Government bonds is retained. The exemption also extends to some state bonds and other government-issued securities. Critical Requirement: You must use government-approved banking channels (i.e., any financial institution authorized by the Central Bank of Nigeria to deal in foreign currency transactions). This documentation is essential for claiming the exemption. Important Distinction: Residency and Tax Liability Nigerian Residents: Individuals legally defined as resident in Nigeria are liable to pay tax on their worldwide income (both domestic and foreign). The exemption above is a crucial relief on foreign passive income (dividends, interest, rent, royalty). Non-Residents: Individuals legally defined as non-resident are only liable to Nigerian tax on income derived from Nigeria. Income earned outside Nigeria by a non-resident is generally not subject to Nigerian tax, regardless of whether it is remitted. Agricultural Income: Encouraging Food Security Income derived from agriculture, livestock, horticulture, or fishing benefits from significant tax incentives. Any small or medium sized company engaged in primary agricultural production shall be granted, pursuant to an application to the President, through the minister, an initial tax-free period of four years. This may be extended, subject to the satisfactory performance of such primary agricultural production, for an additional maximum period of two years. Additionally, with these new laws, food, education, transport, and agriculture will be VAT-free, according to the Executive Chairman of FIRS. This exemption serves Nigeria’s food security objectives while recognizing that many agricultural workers operate at subsistence levels. Statutory Contributions: Building Your Future Tax-Free The following deductions are exempted from PITA: National Housing Fund Contribution, National Health Insurance Scheme, Life Assurance Premium, National Pension Scheme, Gratuities. Certain mandatory contributions don’t just reduce your taxable income—they’re entirely exempt: National Pension Scheme contributions – Building retirement security while reducing current tax National Housing Fund (NHF) payments – Contributing toward homeownership, tax-free National Health Insurance Scheme (NHIS) contributions – Health protection without tax penalties Life insurance premiums – Securing your family’s future (for yourself or spouse) These exemptions create powerful incentives for long-term financial planning while lowering your immediate tax burden. Investment Returns: Strategic Exemptions The Act retains the exemption of income earned from federal government bonds and extends the exemption to state bonds, making them attractive for risk-averse investors seeking stable returns. However, the exemption does not extend to corporate bonds. Share transactions: The tax exemption threshold for the sale of shares in Nigerian companies has been increased to ₦150 million (from ₦100 million) in any 12 consecutive months, provided that the gains do not exceed ₦10 million. These provisions encourage participation in Nigeria’s capital market and government financing. Insurance Benefits: Protection Without Taxation Life insurance payouts and legitimate claim settlements are tax-free. When you receive a life insurance benefit or successfully claim on your policy, the amount remains intact. This makes insurance more effective as a financial protection tool, encouraging more Nigerians to secure coverage. Gifts Received by Individuals: Under the new laws, non-cash gifts received by individuals are explicitly exempt from income tax, simplifying tax planning. Capital Gains on Personal Assets (Up

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Nigeria Tax Act 2025: How the New 4% Development Levy Impacts Nigeria's Manufacturers

Nigeria Tax Act 2025: How the New 4% Development Levy Impacts Manufacturers

Leave a Comment / Tax Acts 2026, Compliance Audits, Excellium Blog / Damilola Babatunde

Nigeria’s manufacturing sector has long been challenged by a complex and fragmented tax landscape, where navigating numerous, overlapping levies often diverted critical resources from core business activities and innovation. To address these systemic inefficiencies and foster a more transparent business environment, the Nigerian Tax Reform Acts of 2025 were signed into law on June 26, 2025. This comprehensive overhaul, with most key provisions, including the new levy, taking effect from January 1, 2026, introduces a strategic simplification to corporate taxation. A major element is the 4% Consolidated Development Levy, designed to streamline compliance for manufacturers.  What is the Consolidated Development Levy? The Consolidated Development Levy is a new fiscal measure mandated by the Nigeria Tax Act (NTA) 2025, which imposes a flat rate of 4% on the assessable profits of qualifying companies under the Section 59 of the NTA. “Assessable profits” refer to the taxable profits of a company before certain deductions like capital allowances and trading losses are made. The core intent of this levy is not to introduce an additional tax burden but to simplify and unify several pre-existing, often confusing, sector-specific taxes into a single, predictable charge. This unified approach is expected to significantly reduce administrative overhead and enhance the predictability of tax obligations for manufacturers across the country. What taxes does the new levy replace? The 4% Consolidated Development Levy effectively sweeps away and replaces four distinct federal levies that previously applied to various companies, including manufacturers. This consolidation eliminates the complexity of calculating and remitting multiple taxes to different agencies. The replaced levies include: Tertiary Education Tax (TET): Previously a 3% charge on assessable profits. This tax funded universities and polytechnics across Nigeria. It was the largest of the four sectoral taxes National Information Technology Development Agency (NITDA) Levy: Formerly charged at 1% of the profits before tax. The National Information Technology Development Agency Levy supported Nigeria’s digital transformation and IT infrastructure development. National Agency for Science and Engineering Infrastructure (NASENI) Levy: A much smaller levy, previously at 0.25%. It funded the National Agency for Science and Engineering Infrastructure, supporting research and innovation. Police Trust Fund (PTF) Levy: Previously applied at a rate of 0.005%. It was the smallest levy, which helped fund police infrastructure and welfare programs. Total under old system: 4.255% of assessable profits Total under new system: 4% Development Levy Instead of managing these four separate compliance requirements, manufacturers now have a single, clear obligation, simplifying their operational processes and aligning tax filings with their Companies Income Tax (CIT) timelines.  How manufacturers benefit from this consolidation The introduction of the Consolidated Development Levy provides several strategic advantages for Nigeria’s manufacturing sector: Streamlined and Simplified Compliance: The primary benefit is a significant reduction in the administrative burden associated with tax compliance. By replacing four separate tax calculations and filing processes with one, finance and accounting teams can focus on strategic financial planning rather than manual, fragmented reporting. Increased Financial Predictability: The uniform 4% rate on assessable profits provides greater certainty in financial forecasting, which is crucial for manufacturers making long-term capital investments in machinery and infrastructure. Exemption for Small Businesses: The legislation offers substantial relief for micro, small, and medium enterprises (MSMEs). Small companies are defined as those with an annual turnover not exceeding NGN100 million and total fixed assets below NGN250 million. These entities are explicitly exempt from the new Development Levy, along with Corporate Income Tax (CIT) and Capital Gains Tax (CGT). This exemption encourages formalization and growth without immediate tax pressure. Targeted Funding for National Priorities: The revenue generated from this consolidated levy is earmarked to fund critical national institutions and initiatives, including education, student loans, technology development, and security. The Bottom Line The Development Levy represents Nigeria’s effort to simplify its tax system. For manufacturers who were already paying all four previous levies, this change brings slight savings and significant administrative relief. The real benefit is simplification: one levy, one form, one deadline, filed with your CIT return. However, the overall tax reform package includes trade-offs. While you’re saving on the Development Levy and compliance costs, you’re facing higher Capital Gains Tax and adjusted capital allowances. The key is to understand exactly how these changes affect your specific business situation and plan accordingly.

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