Company Income Tax (CIT) — Calculation Methodology
Determines company income tax liability based on company size classification, assessable profit, and applicable CIT rates including the Development Levy.
Determines company income tax liability based on company size classification, assessable profit, and applicable CIT rates including the Development Levy.
Classify Company Size
Section 55The company is classified as small, broad exempt, or large based on gross annual turnover, total fixed assets, and whether it provides professional services. Small companies (turnover ≤₦50M, assets ≤₦250M, non-professional) and broad exempt companies (turnover ≤₦100M, assets ≤₦250M) are exempt from CIT.
| Classification | CIT Rate | Turnover Limit | Notes |
|---|---|---|---|
| Small Company | 0% (Exempt) | ≤₦50M | Assets ≤₦250M, non-professional |
| Broad Exempt | 0% (Exempt) | ≤₦100M | Assets ≤₦250M |
| Large Company | 30% | >₦100M | No asset limit |
Calculate Standard CIT
Section 56For large companies, CIT is calculated at 30% of assessable profit. Assessable profit is the company’s total profit after deducting allowable business expenses and capital allowances.
Calculate Minimum Tax
Section 57Minimum tax is computed as 0.5% of gross annual turnover. This serves as a floor — companies pay the higher of standard CIT or minimum tax.
Determine Actual Tax Payable
Sections 56–57The actual CIT payable is the higher of the standard CIT (30% of profit) or the minimum tax (0.5% of turnover). This prevents companies with low reported profits from paying zero tax.
Add Development Levy
Section 59A Development Levy of 4% of assessable profit is added to the CIT liability. This replaces the former Tertiary Education Tax (TET).
Compute Total Tax Liability
Sections 55–59The total company tax liability is the sum of the actual CIT payable and the Development Levy. The effective tax rate is expressed as a percentage of gross turnover for reference.
This methodology is provided for informational and educational purposes only. Tax calculations are estimates based on the information provided and the rates published in the Nigeria Tax Act 2025. Individual circumstances may vary. Consult a qualified tax adviser for personalised guidance.