Common Misconceptions¶
Last reviewed: 2026-04-01
These are recurring misunderstandings that customers bring to support. Agents should proactively address these when they surface.
1. "Small company = no taxes at all"¶
Reality: Small company exemptions (NTA 2025 §56) apply to CIT, CGT, and Development Levy only. Small companies with employees MUST still withhold and remit PAYE. This is the single most common misconception.
What to say: "Being a small company exempts you from Company Income Tax, Capital Gains Tax, and the Development Levy. However, PAYE is a personal income tax on your employees — you're the collection agent, and you must remit it to your State Internal Revenue Service regardless of your company size."
2. "VAT exempt = I don't need to worry about VAT at all"¶
Reality: A business below ₦100M turnover is not required to register for VAT. However, they still PAY VAT on their purchases (input VAT). They just don't need to charge VAT on their sales or file VAT returns. If they are already VAT-registered, de-registration may be appropriate.
3. "FIRS handles all my taxes"¶
Reality: FIRS was renamed to NRS in 2026. More importantly, PAYE goes to SIRS (state), not NRS (federal). Businesses need to file with BOTH NRS (VAT, WHT, CIT) and SIRS (PAYE).
4. "My accountant will handle everything — I don't need to use Finora regularly"¶
Reality: Finora works best with consistent data entry. If invoices, expenses, and receipts are not recorded promptly, financial reports will be inaccurate and tax returns will be incomplete. The bookkeeping reminder emails (configurable in Settings → Reminders) help maintain this habit.
5. "The Balance Sheet should always balance automatically"¶
Reality: Finora's Balance Sheet reads from the COA (Chart of Accounts). If journal entries are incomplete, orphaned, or manually adjusted, the Balance Sheet may show an imbalance. The "Investigate Imbalance" button helps diagnose the cause.
6. "Voiding an invoice deletes it"¶
Reality: Voiding an invoice creates a reversal journal entry — the original invoice remains in the system with a "Voided" status. It is not deleted. This is by design for audit trail compliance.
7. "WHT is money I owe to the government"¶
Reality: WHT has two sides. WHT you deducted from supplier payments IS money you owe to NRS (payable). But WHT your customers deducted from your invoices is money owed TO you — it's a credit (receivable) that you can offset or claim back from NRS. These are tracked separately in Finora.
8. "I need to manually enter salary expenses after running payroll"¶
Reality: Finora's payroll auto-posts to the GL when a payroll run is approved. Manually creating salary expenses will cause double-counting. The info banner on the Payroll Runs tab warns about this.
9. "Filing Services means Finora will pay my taxes"¶
Reality: Filing Services prepares and submits the tax returns on the business's behalf. The business is still responsible for paying the actual tax owed (via bank transfer to NRS/SIRS). Filing Services handles the paperwork, not the payment.
10. "₦100M threshold applies to all tax exemptions"¶
Reality: There are two different thresholds: - ₦50M turnover = small company for CIT/CGT/Development Levy (NTA 2025 §56) - ₦100M turnover = small business for VAT registration (NTAA 2025 §147)
A business with ₦75M turnover is VAT-exempt but NOT CIT-exempt. This is a known display issue in the app where some pages show ₦100M for CIT.