Nigerian companies used to face a stack of earmarked charges on top of companies income tax. The Nigeria Tax Act, 2025 collapses most of them into a single development levy. On 29 June 2026, the Nigeria Revenue Service issued Information Circular No. 2026/01 explaining how it will compute both CIT and the levy.
What it replaces
- Tertiary Education Tax
- National Information Technology Development (IT) levy
- NASENI levy
- Police Trust Fund levy
How it is calculated
The levy is 4% of total assessable profits. It does not apply to small companies or non-resident companies, and assessable profits attributable to hydrocarbon tax are excluded.
| Illustration | ₦ |
|---|---|
| Assessable profits | 500,000,000 |
| Development levy at 4% | 20,000,000 |
| Companies income tax at 30% (on total profits, assumed equal) | 150,000,000 |
| Combined charge | 170,000,000 |
Note that the levy is based on assessable profits — before capital allowances — while CIT is based on total profits after capital allowances. Capital-intensive businesses should model both carefully.
Planning points
- Update your 2026 tax provision and quarterly forecasts for the levy.
- Stop provisioning separately for the legacy levies from the 2026 year of assessment, but keep records of earlier years in case of audit.
- Check whether your company qualifies as small — if so, it pays no levy at all.
- For multinationals, include the levy when testing the 15% minimum effective tax rate.
Sources
- KPMG — Nigeria: Guidance on new corporate income tax rules, including 15% minimum tax (Oct 2026)
- PwC Nigeria — The Nigerian Tax Reform Acts
- EY — From legislation to action: 2026 business outlook on tax reforms in Nigeria and Ghana
This article is general information based on the Nigeria Tax Act 2025, the Nigeria Tax Administration Act 2025 and published commentary as at its date. It is not tax advice. Rules, thresholds and NRS guidance may change — speak to KJB about your specific circumstances.
