One of the most welcome changes in the Nigeria Tax Act, 2025 is a wider exemption for small companies. Under the old law, small companies (turnover under ₦25 million) paid 0% CIT. The new threshold is four times higher, and the exemption covers more taxes.
The test
A company is a small company if, for the year, it has annual gross turnover of ₦100 million or less and total fixed assets not exceeding ₦250 million. Both conditions must be met.
What a small company does not pay
- Companies income tax
- Tax on capital gains
- The 4% development levy
What small companies still have to do
- Register for tax and obtain a TIN — failure attracts an administrative penalty of ₦50,000 in the first month and ₦25,000 for each further month.
- File annual returns, even when no tax is payable. The exemption is not an exemption from filing.
- Deduct and remit PAYE for employees and withholding tax where required.
- Keep proper books — the exemption depends on proving your turnover and asset values.
Watch the boundaries
Growing businesses should monitor turnover through the year. Crossing ₦100 million moves you into the full regime: 30% CIT plus the 4% development levy on assessable profits. Splitting one business across several companies just to stay under the threshold is likely to be challenged, and anti-avoidance rules apply.
Sources
- PwC Nigeria — The Nigerian Tax Reform Acts
- Banwo & Ighodalo — A taxpayer’s guide to compliance, offences, penalties and dispute resolution
- 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.
