Choosing between Formal and Informal filing
TaxTech NG offers two filing paths designed for different types of taxpayers and income structures.
Overview
Your filing path depends on your employment type, income structure, and whether you maintain formal financial records.
Who Should Use Formal Filing?
Formal filing is for:
- Salaried employees with PAYE deductions
- Freelancers or consultants with steady documented income
- Business owners who maintain accounting records
- Anyone who wants to claim deductions and reliefs (pension, NHF, life insurance)
Who Should Use Informal Filing?
Informal filing (presumptive tax) is for:
- Artisans, tailors, mechanics, barbers
- Small traders, hawkers, market sellers
- POS operators and mobile money agents
- Micro-businesses without formal records
Key Differences
Formal filing uses a 4-step workflow (Profile, Income, Deductions, Review & File) and calculates tax progressively based on income bands. Informal filing uses a 3-step workflow (Basic Info, Business Category Selection, Review & File) with fixed presumptive tax amounts per business size category.
Important Notes
Choose the path that matches your income documentation. If you're unsure, start with Informal filing—it's simpler and faster. You can always upgrade to Formal filing in future tax years as your business grows.