COMPANIES INCOME TAX ACT

An Act that imposes income tax on the profits of companies operating in Nigeria, including allowable deductions and filing obligations. It targets all registered companies and non-resident companies with economic presence in the country. This ensures fair taxation and generates revenue for the government.

What Is This Policy?

The principal legislation imposing income tax on the profits of companies operating in Nigeria, prescribing allowable deductions, filing obligations, and enforcement powers of the Federal Inland Revenue Service.

Who Does It Target?

All companies registered in Nigeria Non-resident companies with significant economic presence in Nigeria FIRS as the administering authority Tax practitioners advising companies on compliance

What Does It Aim to Achieve?

Ensure companies pay a fair share of tax on their profits earned from Nigerian operations, provide certainty on tax treatment of business activities, and generate revenue for the Federation.

Key Features

Corporate Tax Rate: Standard CIT rate is 30% for large companies; 20% for medium companies (N25m-N100m turnover); 0% for small companies (below N25m turnover). Allowable Deductions: Prescribes which expenses are deductible in computing taxable profits including depreciation and capital allowances. Pioneer Status: Companies in pioneer industries may apply for tax holiday of up to 5 years. Digital Economy: Extended to non-resident companies with significant economic presence in Nigeria since Finance Act 2019.

Current Status

Rollout Stage: Active Coverage: All companies operating in Nigeria Beneficiaries: Government revenue; compliant businesses through certainty Funding: Revenue measure

How to Access

All companies must register with FIRS and file annual tax returns CIT returns due 6 months after the company's accounting year end Tax must be paid in installments (estimated tax) during the year Application method: Register and file at https://www.firs.gov.ng

Important Terms

Failure to file on time attracts penalties FIRS assessments must be objected to within 30 days Pioneer status requires a formal application and approval by the NIPC

Official Resources

Website: https://www.firs.gov.ng Contact: Federal Inland Revenue Service (FIRS)

Legal Framework

The Companies Income Tax Act (CITA) is the principal legislation taxing the profits of companies in Nigeria. It derives constitutional authority from the Second Schedule of the 1999 Constitution (Exclusive Legislative List — corporate taxation). Administered by the Federal Inland Revenue Service under the FIRS Act 2007, CITA aligns with the OECD Model Tax Convention and has been amended by the Finance Acts (2019–2023) to reflect international tax standards including BEPS recommendations.