Nigerian company income tax from 2026
Nigeria's company income tax, Development Levy and minimum effective tax rate from 2026, and what Achekam computes once its rules are approved.
By Achekam · · 4 min read · For Accountants & audit firms in Nigeria
For Nigerian firms, 2026 is the first year in which company tax computations start from a new statute. The Nigeria Tax Act 2025 commenced on 1 January 2026, and it changed the headline rate structure, folded several levies into one and introduced a minimum effective tax rate. Tax periods before that date stay under the repealed laws, so for a while a practice will be working under two regimes at once.
This article sets out how company income tax is worked out under the new Act at the time of writing, which figures are still disputed, and what Achekam does and does not compute. The short version on the software side: Achekam is built to compute the new taxes, but it computes nothing until its rules have been approved, and it refuses periods it has no rules for.
Small companies and everyone else
From 1 January 2026, a small company in Nigeria pays 0% company income tax and every other company pays 30% (Nigeria Tax Act 2025, s.56). The signed Act contains no mechanism that reduces the rate to 25%, whatever earlier commentary suggested.
The difficulty is the definition of "small". Two official texts of the 2025 tax Acts exist, the version gazetted by FIRS (now the Nigeria Revenue Service, NRS) and the National Assembly's own text of January 2026, and some figures differ between them. The small-company turnover limit is one of those figures. The NRS has said it applies the gazetted laws, and re-gazetting was ordered. Until that settles, a client close to the limit is a judgement call the partner should document, with both texts on file.
The Development Levy
Companies other than small and non-resident companies pay a Development Levy of 4% of assessable profits (s.59). It is not charged on profits assessed to hydrocarbon tax.
The levy replaces the Tertiary Education Tax, the NITDA IT levy, the NASENI levy and the Cybercrime Act levy. Whether it also replaces the Police Trust Fund levy is uncertain, so keep that question open on any computation where it matters rather than assuming either answer.
The minimum effective tax rate
Section 57 sets a minimum effective tax rate of 15% for companies in multinational groups and for companies above a turnover threshold. The threshold is another contested figure. Sources disagree on it, and Achekam treats it as unsettled. For a large client near any of the quoted thresholds, run the test both ways and record which reading the firm has applied.
Filing the return
Every Nigerian company, including a small or exempt one, must file an annual self-assessment return. For a company in business for more than 18 months, it is due within 6 months after the year end, and the tax is paid by the filing due date. A small company may attach taxpayer-attested accounts instead of audited ones. The 0% rate removes the tax; it does not remove the return.
The Federal Government's transition guidelines for the 2025 tax Acts are worth reading alongside the Act for periods that sit near the changeover.
What Achekam computes, and when
Achekam's Revenue Service Centre is built to compute Nigerian company income tax with the Development Levy and the minimum effective tax rate check, together with VAT, withholding tax, capital gains and stamp duty. Specialised regimes such as petroleum, extractive and non-resident digital are refused with the reason "assessment required". Banking, insurance, telecom and capital markets clients carry a warning that sector rules are not in the rule book.
Three limits decide what happens today:
- Nothing is computed until the rules are approved. Every Nigerian tax figure in Achekam's rule book was seeded "under review", and Achekam computes nothing from a figure until an Achekam platform administrator approves it. Firms cannot approve these rules, and no firm user can change a rate. As shipped, Achekam computes no Nigerian tax figure.
- Contested figures need two administrators. The small-company turnover, the minimum-ETR turnover threshold and the PAYE remittance day are not used until one platform administrator chooses a candidate with a reason and a different administrator approves it. Until then the size class shows as UNDETERMINED, with what each candidate would give.
- Periods before 1 January 2026 are refused. Achekam holds no Nigerian tax rule for earlier periods. Company tax and levy rules resolve on the period's first day, so a period that straddles 1 January 2026 is refused too.
Take a client whose financial year runs from April to March. Its year that began in April 2025 straddles the commencement date, so Achekam refuses to compute it. That year has to be worked out by the firm outside Achekam, under the law that applied to it.
Where Achekam does compute, a return is prepared by one person, reviewed by a second and approved by a third, after which its rule snapshot and figures are frozen. An amendment becomes a new version; nothing is overwritten.
A first-year checklist
- Confirm each client's financial year and whether it straddles 1 January 2026.
- Decide, with reasons, whether each client is a small company, noting where the two texts disagree.
- Apply the Development Levy to every company that is not small or non-resident.
- Test large and group clients against the minimum effective tax rate.
- Check in the Revenue Service Centre whether a figure is approved or still under review before relying on any output.
- File every company's self-assessment return, including small ones.
Where to go from here
Sort your Nigerian clients into three groups: straddling periods to compute outside Achekam, small-company calls to document, and large clients to test against the 15% minimum. Then keep a close watch on the dates after an assessment arrives, covered in objecting to a tax assessment in Nigeria or Kenya.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
