Company Income Tax (CIT)

Company Income Tax (CIT) is levied on the profits of companies operating in Nigeria. Under the NTA 2025 (which replaced the Companies Income Tax Act — CITA), CIT is administered by the Federal Inland Revenue Service (FIRS). The NTA 2025 introduced a tiered rate system based on company turnover and a new Development Levy.

Companies are taxed based on their gross turnover: • Small companies (turnover ≤ ₦25 million): 0% CIT — completely exempt • Medium companies (turnover > ₦25M but ≤ ₦100M): 20% of taxable profit • Large companies (turnover > ₦100M): 30% of taxable profit This three-tier system provides significant relief for micro and small businesses, encouraging formalisation and compliance.

A new 4% Development Levy is imposed on the assessable profit of all companies, in addition to CIT. This replaces the previous Tertiary Education Tax (TET) of 2.5%. The Development Levy applies to all companies, including those in the 0% CIT bracket (small companies). However, there are proposals for exemptions for the smallest companies — check the latest gazette notices. Development Levy proceeds fund education, health, and infrastructure development.

Assessable profit is computed as: Gross Profit (Revenue − Cost of Sales) Less: Allowable deductions (salaries, rent, depreciation, capital allowances, etc.) = Assessable Profit Key deductions: • Capital allowances (depreciation schedules prescribed by law) • Wholly, exclusively, necessarily, and reasonably incurred expenses • Donations to approved organisations (up to 10% of assessable profit) • Bad debts that are specifically identifiable and written off • Research & development expenditure

Companies must file annual CIT returns with the FIRS within 6 months of the end of their accounting year (e.g., by 30 June for a December year-end). Filing includes: • Audited financial statements • Tax computation schedule • Capital allowance schedule • WHT credit notes New companies have 18 months from incorporation to file their first return.

• Late filing: ₦50,000 for the first month, ₦25,000 for each subsequent month, plus interest • Failure to file: Assessment based on FIRS's best judgement, plus penalties • Understatement: Additional assessment plus penalty equal to the additional tax • Failure to register with FIRS: ₦10,000 penalty