The Federal Government has retained the corporate income tax rate at 30 percent for all companies except small businesses, under a newly signed Nigerian Tax Act set to take effect from January 2026.
According to the legislation, businesses with an annual turnover below N25 million will continue to enjoy zero percent corporate tax. “Tax shall be levied… in the case of a small company, at 0 percent and any other company, at the rate of 30 percent,” the Act states.
In a significant policy shift, the law also mandates a minimum effective tax rate of 15 percent for certain categories of companies. Firms with an annual turnover of N20 billion or more, and members of multinational enterprise (MNE) groups, will be required to pay an additional tax if their effective rate falls below 15 percent.
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Furthermore, the Capital Gains Tax Act has been repealed, effectively scrapping the 10 percent capital gains tax. The new tax regime consolidates gains into the corporate tax structure.
This move aligns with earlier reform efforts by the Presidential Committee on Fiscal Policy and Tax Reforms, led by Taiwo Oyedele, who had suggested a potential cut in corporate tax to boost Nigeria’s business climate.
