Amaka incorporated her event management company in Abuja two years ago. She has a CAC registration number, a corporate bank account, and a growing client list. Last year her company made a profit of ₦18 million after paying all her expenses.
Someone told her she owes Companies Income Tax (CIT). Someone else told her small companies don't pay it anymore. She is not sure who to believe.
Both are partly right. This guide explains exactly how it works.
Companies Income Tax (CIT) is the tax on the profits of a company registered in Nigeria. If your business is registered as a limited liability company (Ltd) with the Corporate Affairs Commission (CAC) and it makes a profit, CIT is the tax that applies to those profits.
Critical distinction: CIT applies to companies (CAC-registered, Ltd). If you are a sole trader — you run your business in your own name without incorporation — you do not pay CIT. You pay Personal Income Tax (PIT) instead. If you are not sure which category you are in, check whether you have a CAC registration certificate with "LTD" or "PLC" in the company name.
Any company incorporated in Nigeria that has taxable income in a year of assessment owes CIT — with one important exception.
Under the Finance Act 2025, small companies with annual turnover of ₦100 million or less AND fixed assets of ₦250 million or less pay 0% CIT.
This is not a reduced rate. It is a complete exemption.
There is no medium-sized company band — it is a straight threshold. If you are below ₦100 million, you owe nothing. If you are above it, you pay 30% on your taxable profit.
Back to Amaka: her company had revenue of ₦18 million last year — well below the ₦100 million threshold. She owes zero CIT, regardless of how profitable she was.
Important: The ₦100M threshold changed under the Finance Act 2025. Any article or advice you received before 2026 citing ₦25M or ₦50M as the threshold is out of date. The current correct figure is ₦100M.
CIT is charged on taxable profit, not on revenue. The calculation is:
Taxable profit = Revenue − Allowable deductionsAllowable deductions are legitimate business expenses: staff salaries, rent, utilities, materials, professional services, depreciation on equipment. You are taxed on what is left after your real business costs, not on every naira that came in.
Not all expenses are deductible. Personal expenses run through the company, excessive entertainment, fines and penalties, and capital expenditure (large purchases like equipment) are not deductible as expenses — though capital expenditure may qualify for Capital Allowances separately.
This is where a tax adviser earns their fee. The deductibility rules are specific and the NRS (Nigeria Revenue Service) audits on this basis. If your company is above the ₦100M threshold, work with an accountant who understands CIT.
CIT is assessed annually based on your company's financial year. The filing and payment deadline is 6 months after your accounting year-end.
Your accounting year-end is the date you chose when you set up your company's books. Most Nigerian companies use 31 December because it aligns with the calendar year, but it can be any date.
Before the annual return, the NRS requires quarterly provisional payments based on estimated profit. These are:
If your company is above the ₦100M threshold, your accountant should be managing these payments. If you miss them, penalties apply.
A company with no taxable profit owes no CIT — but there is a Minimum Tax provision for large companies. Under the Finance Act 2025, if your company's taxable income is zero or negative but your turnover exceeds ₦100 million, a minimum tax of 0.5% of gross turnover may apply.
Small companies (≤ ₦100M) are exempt from minimum tax as well as regular CIT.
Companies above the ₦100M threshold also pay Education Tax (ET) at 3% of assessable profit (profit before capital allowances). This is a separate levy, not part of CIT, but filed alongside the CIT return.
Small companies below ₦100M do not pay Education Tax.
Even if you owe zero CIT (because you are below the threshold), you may still be required to file a CIT return. Filing requirements depend on your registration status and whether the NRS has sent you a demand.
The return includes:
If you are below ₦100M and owe zero CIT, the filing is simpler — but do not skip it. An unfiled return creates a gap in your tax compliance record, which can cause problems when you apply for bank loans, government contracts, or TCC (Tax Clearance Certificate).
A Tax Clearance Certificate confirms that your company has no outstanding tax liability. It is required for:
The NRS issues TCC based on three years of filed returns showing no outstanding liability. If you have been below the ₦100M threshold and legitimately owe zero CIT — but you have not been filing returns — you will not qualify for a TCC. Filing correctly, even when nothing is owed, protects your ability to get this certificate.
Lucrive's Tax Calculator has a CIT module. You enter:
The calculator shows whether you are in the 0% band or the 30% band, and — in Advanced mode — adds Education Tax and Minimum Tax to the picture.
It is an estimate tool, not a filing tool. Use it to understand your position before meeting your accountant. Knowing you are comfortably below ₦100M and owe zero CIT means you can have a shorter, more focused conversation with your tax adviser.
Open the Tax Calculator in Lucrive →
If your company's annual revenue is below ₦100 million, you owe zero Companies Income Tax under the Finance Act 2025.
What you still owe:
None of these disappear just because you are below the CIT threshold. But the most feared tax — the one on your company's profit — is zero for most MSMEs in Nigeria.
Confirm your position with a qualified tax adviser if your revenue is close to the threshold or growing rapidly. The exemption applies based on the full accounting year, not just a single month.
Sources & further reading