Most guides to corporate tax in Nigeria are now wrong. President Bola Tinubu signed four tax reform acts into law on 26 June 2025, and they take effect on 1 January 2026, per the Nigeria Tax Act 2025 gazette. The reform replaces the old Companies Income Tax Act (CITA) framework, raises the small-company threshold, scraps the Tertiary Education Tax, and renames the tax authority.
This guide covers the post-reform regime: the 2026 corporate income tax (CIT) rates, turnover thresholds, filing rules, deadlines, penalties, and what changed. Pre-2026 figures appear only as labeled “before” values, never as current facts. We still say “FIRS” alongside the new name because most searchers use the old term.
What Changed Under Nigeria’s 2025 Tax Reform?
The Nigeria Tax Act (NTA) 2025 and the Nigeria Tax Administration Act (NTAA) 2025 consolidate CITA and related laws from 1 January 2026, and the Federal Inland Revenue Service (FIRS) becomes the Nigeria Revenue Service (NRS). Both acts were gazetted on 26 June 2025 as part of a four-act package, per the Nigeria Tax Administration Act 2025 gazette.
| Item | Before (pre-2026) | From 1 January 2026 | Source |
|---|---|---|---|
| Governing law | Companies Income Tax Act (CITA) | Nigeria Tax Act 2025 + Nigeria Tax Administration Act 2025 | NTA 2025 gazette |
| Administrator | Federal Inland Revenue Service (FIRS) | Nigeria Revenue Service (NRS) | KPMG Nigeria |
| Small company (0% CIT) | Turnover up to NGN 25m | Turnover up to NGN 100m + fixed assets up to NGN 250m | PwC Nigeria |
| Medium tier | 20% (NGN 25m–100m) | Eliminated | PwC Nigeria |
| Standard CIT rate | 30% | 30% (future 25% possible by order) | NTA 2025 gazette |
| Education/sector levy | 3% Tertiary Education Tax | 4% Development Levy (consolidated) | NTA 2025 gazette |
The Nigeria Revenue Service (Establishment) Act repeals the FIRS Act of 2007 and transfers all functions, assets, and staff to the NRS. President Tinubu confirmed on 30 December 2025 that the laws would start as planned, per the State House announcement.
What Is the Corporate Tax Rate in Nigeria?
The standard corporate income tax rate in Nigeria is 30% for large companies and 0% for qualifying small companies from 1 January 2026, under Section 56 of the NTA 2025. The old 20% medium tier is eliminated. The act includes a proviso allowing a future cut to 25% by presidential order, per the Nigeria Tax Act 2025 text.
Corporate income tax is exclusively federal. Nigeria charges no state or municipal CIT, so a company files one CIT return with the NRS regardless of where it operates. The reform comparison table above holds the full pre-2026 versus 2026 progression.
What Is the Corporate Tax Rate for Small Companies in Nigeria?
Small companies pay 0% CIT, with the qualifying turnover threshold raised to NGN 100 million or less plus a fixed-asset test of NGN 250 million or less, per PwC Nigeria. Both tests must be met. The old CITA threshold was turnover of NGN 25 million or less.
One caveat: Nigerian legal analysis flags a drafting conflict, with the NTA setting the small-company turnover at NGN 50 million while the NTAA uses NGN 100 million, per AO2 Law. Professional services firms are excluded from the 0% rate regardless of size. Confirm your position with the NRS before filing.
What Is the Development Levy, and What Happened to Tertiary Education Tax?
The NTA 2025 replaces the Tertiary Education Tax (TET), the NITDA information technology levy, the NASENI levy, and the Police Trust Fund levy with a single Development Levy of 4% of assessable profits, under Section 59. Small companies and non-resident companies are exempt, per the Nigeria Tax Act 2025 text.
TET was 2.5%, rose to 3%, and is now subsumed into this one charge. Half of the levy’s proceeds are still earmarked for the Tertiary Education Trust Fund. Companies no longer compute TET separately alongside CIT.
Is There a Minimum Tax in Nigeria?
Yes. The NTA 2025 introduces a 15% minimum effective tax rate (ETR) aligned with the OECD Pillar Two global minimum tax, under Section 57. It applies to multinational enterprise (MNE) groups with consolidated turnover of at least EUR 750 million and to large domestic companies above a high turnover trigger, per PwC Nigeria.
Where a company’s effective rate falls below 15%, it recomputes and pays a top-up to reach 15%. The domestic turnover trigger is reported at NGN 50 billion by PwC and KPMG, while the gazetted act text references NGN 20 billion, so confirm the figure for your group. The legacy 0.5%-of-turnover minimum tax regime is revised under the new framework.
One platform to simplify global tax and compliance
See why high-growth companies trust Commenda
How Are Non-Resident Companies Taxed in Nigeria?
Non-resident companies pay Nigerian tax on Nigeria-source income where they have a permanent establishment (PE) or a significant economic presence (SEP). The SEP triggers from the 2020 SEP Order are NGN 25 million or more in Nigerian revenue, use of a Nigerian domain name, and digital activity targeted at Nigeria, per PwC Nigeria.
Withholding tax often acts as the final tax for non-residents on passive income. Confirm the SEP thresholds carry into the NTA 2025 before relying on them. If you are weighing a local presence, see our guide on setting up a subsidiary company in Nigeria.
What Withholding Tax Rates Apply in Nigeria?
Withholding tax (WHT) is an advance or final income tax on specified payments. Dividends and interest attract 10%, and royalties attract 10% for corporate recipients, often reduced under a double tax treaty, per PwC Nigeria withholding taxes.
| Payment | Rate | Treatment | Treaty-reduced? | Source |
|---|---|---|---|---|
| Dividends | 10% | Often final for non-residents | Yes, under a treaty | PwC |
| Interest | 10% | Advance or final | Yes, under a treaty | PwC |
| Royalties (corporate recipient) | 10% | Advance or final | Yes, under a treaty | PwC |
| Royalties (non-corporate recipient) | 5% | Advance or final | Yes, under a treaty | PwC |
| Payee without a TIN | Doubled, capped at 20% | Advance | No | PwC |
Verify rates against the 2024 Deduction of Tax at Source (Withholding) Regulations and the NTA 2025, which refine the regime.
What Is the VAT Rate in Nigeria?
Value Added Tax (VAT) stays at 7.5%, and proposals to raise it were dropped in the 2025 reform, per PwC Nigeria. The rate itself is unchanged from the pre-reform position.
The mechanics did change. The reform broadens input VAT recovery to cover assets, services, and overheads, revises the revenue-sharing formula, and expands zero-rating on essential goods and services.
Does Nigeria Still Charge 10% Capital Gains Tax?
No, not as a flat standalone rate for companies. The former regime taxed chargeable gains at 10% under the Capital Gains Tax Act, separate from CIT. The NTA 2025 consolidates capital gains tax (CGT) for companies into the income tax framework, so corporate gains are taxed in line with the CIT rate, per PwC Nigeria.
If you are searching for the old “10% CGT” figure, treat it as the pre-2026 position. Confirm the exact gazetted treatment for your transaction before filing.
How Do You File Corporate Tax in Nigeria?
Companies register, obtain a Tax Identification Number (TIN), and file annual self-assessment returns with the NRS (formerly FIRS). A TIN is now largely auto-generated on incorporation with the Corporate Affairs Commission. Filing follows these steps:
- Register for a TIN and set up access to the NRS e-filing portal (TaxProMax).
- Prepare IFRS-compliant audited financial statements and a tax computation.
- Complete and sign the self-assessment returns.
- Pay the tax, with an option to apply for up to three installments on approval, making the initial payment before the due date.
- File evidence of payment with the return.
A Tax Clearance Certificate (TCC) proves filing and payment and is needed for government contracts and similar transactions. Confirm TCC procedure continues under the Nigeria Tax Administration Act 2025. For help choosing a provider, see the best corporate compliance service providers in Nigeria.
When Is the Corporate Tax Deadline in Nigeria?
Corporate tax returns are due within 6 months after the financial year-end, or 18 months after incorporation for new companies, whichever is earlier, per PwC Nigeria. The tax year follows the company’s accounting period, and many companies use a 31 December year-end.
Established companies were historically assessed on a preceding-year basis (PYB). The NRS may grant a discretionary filing extension of up to 2 months. Confirm whether PYB and the extension carry unchanged into the NTAA 2025 before relying on them.
What Are the Penalties for Late Tax Filing in Nigeria?
Late filing historically attracts NGN 25,000 for the first month and NGN 5,000 for each later month, plus a 10% late-payment penalty and interest at commercial rates. The NTAA 2025 revises administrative penalties, so verify current amounts with the Nigeria Tax Administration Act 2025.
Can the Tax Authority Audit or Reassess Your Company?
Yes. Self-assessment is subject to NRS review, and the authority can issue a best of judgment (BOJ) assessment where returns are missing or unreliable. Deemed-profit rules let it assess tax where profits are understated, per PwC Nigeria.
The audit window runs up to six years and covers desk reviews, monitoring visits, and full audits. Scrutiny is heightened for transfer pricing, non-resident companies, and digital transactions. Confirm the exact window and procedures under the NTAA 2025.
What Deductions and Limits Apply to Taxable Profits?
Expenses are deductible if they are wholly, reasonably, exclusively, and necessarily incurred for the business. Fines and penalties are not deductible, per PwC Nigeria.
Other key rules shape the effective rate. Interest on foreign related-party debt is capped at 30% of earnings before interest, taxes, depreciation, and amortization (EBITDA). Research and development (R&D) costs, bad debts, and qualifying donations are deductible. Confirm continuation of the 30% EBITDA cap under the NTA 2025.
What Tax Incentives Can Reduce Corporate Tax in Nigeria?
The Pioneer Status Incentive (PSI) is repealed from 1 January 2026 and replaced by the Economic Development Tax Incentive (EDTI), a performance-based 5% annual tax credit on qualifying capital expenditure for up to 5 years, per the NIPC Pioneer Status page. Companies holding valid PSI certificates keep their benefits to expiry.
| Incentive | Benefit | Status from 1 January 2026 | Source |
|---|---|---|---|
| Pioneer Status Incentive (PSI) | 3-year CIT holiday, extendable to 5 years | Repealed; new applications closed 10 November 2025 | NIPC |
| Economic Development Tax Incentive (EDTI) | 5% annual tax credit on qualifying capex, up to 5 years | New; replaces PSI | NIPC |
| Existing PSI certificates | Retain the holiday to approved expiry | Grandfathered (149 holders) | NIPC |
Free trade zone and export processing zone exemptions, export-oriented company reliefs, and agriculture and gas-utilization holidays existed under the old regime. These are being reframed under the reform, so confirm scope with the NRS before claiming them.
How Are Petroleum Companies Taxed in Nigeria?
Legacy upstream contracts fall under the Petroleum Profits Tax (PPT) at rates up to 85%, while the Petroleum Industry Act (PIA) 2021 regime applies Hydrocarbon Tax plus CIT, per PwC Nigeria. Combined upstream headline exposure under the newer regime is often cited around 60%.
Confirm current figures and how the NTA 2025 treats the sector before relying on these rates, as oil and gas provisions sit across several statutes.
Does Nigeria Have Double Tax Treaties?
Yes. Nigeria has double taxation agreements (DTAs) in force with countries including the United Kingdom, Canada, China, the Netherlands, South Africa, France, Belgium, Singapore, Sweden, and Spain, per PwC Nigeria. Treaties provide foreign tax credits and can reduce WHT on dividends, interest, and royalties.
Foreign tax credits are generally treaty-only. Limited non-treaty relief may apply within Commonwealth frameworks. Access to treaty benefits requires meeting the documentation and administrative conditions.
How We Help With Corporate Tax Compliance in Nigeria
Nigeria’s 2026 transition means filing against brand-new rules while last year’s numbers are still everywhere. Commenda’s corporate tax and bookkeeping platform prepares and files Nigerian corporate tax returns, tracks deadlines across the reform, and keeps audit-ready documentation. For cross-border teams, Commenda’s entity management standardizes governance across jurisdictions, and transfer pricing produces OECD-compliant documentation, which matters under the new Pillar Two ETR.
Track every Nigerian due date with the compliance calendar, and compare local providers in our guide to the best corporate compliance service providers in Nigeria. Commenda connects to 100+ ERPs, APIs, and custom integrations, so your filings draw on clean source data.
Book a demo to see how your Nigerian filings map to the new 2026 rules.
About the author
Logan leads Commenda’s Services and Operations team, helping controllers, heads of tax, and finance leaders navigate international expansion. He built a global expert network across 70 countries and previously worked in management consulting across the Middle East and Southeast Asia.
Disclaimer: Commenda and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide or be relied on for tax, accounting, or legal advice. You should consult your own tax, accounting, and legal advisors before engaging in any related activities or transactions.
