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The federal government has maintained the corporate income tax at a flat rate of 30 percent for all companies except small businesses, according to the newly enacted Nigerian Tax Act set to take effect in January 2026.
The new legislation confirms that companies with an annual turnover below N25 million will continue to pay zero percent in corporate tax.
“Tax shall be levied, for each year of assessment in respect of total profits of every company, in the case of a small company, at 0 percent and any other company, at the rate of 30 percent from the commencement of this Act,” the document states.
The law also introduces a minimum effective tax requirement for certain categories of companies.
“Notwithstanding any provision of this Act or any other enactment, where, in any year of assessment, the effective tax rate of a company is less than 15 percent, such company shall recompute and pay an additional tax that makes its effective tax rate equal to 15 percent.
“The provisions of this section shall apply to a company that is a constituent entity of an MNE group and any other company with an aggregate turnover of N20000000000 and above in the relevant year of assessment,” the law adds.
Additionally, the federal government has scrapped the 10 percent capital gains tax following the repeal of the Capital Gains Tax Act through the establishment of the new Nigerian Tax Act. TheCable understands that the capital gains tax is now consolidated into the corporate income tax framework.
This development comes amid earlier reform proposals by the presidential committee on fiscal policy and tax reforms, chaired by Taiwo Oyedele, who announced on June 4, 2024, that a five percent cut in the corporate income tax was under consideration. Oyedele explained that the proposal aimed to reduce the tax rate from 30 percent to 25 percent to enhance the competitiveness of Nigerian businesses and attract investment.
