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Companies Income Tax (CIT)

Direct TaxLast Updated: 2025-12-12

Introduction to CIT

Companies Income Tax (CIT) is a tax imposed on the profit of all incorporated companies in Nigeria (excluding those in the Oil & Gas sector who pay Petroleum Profits Tax).

If you run a registered company (Ltd or Plc), this is your primary tax obligation to the Federal Government. It is managed by the Federal Inland Revenue Service (FIRS).

Rates: Helping Small Businesses Grow

The Finance Act has introduced varying rates to support smaller enterprises. The rate you pay depends on your Gross Turnover:

1. Small Company (0% Tax)

  • Turnover: ₦50 Million or less.
  • Rate: 0%.
  • Benefit: You are fully exempt from paying CIT, but you must still file returns on time to maintain a clean tax record.

2. Medium Company (20% Tax)

  • Turnover: Between ₦25 Million and ₦100 Million.
  • Rate: 20% of taxable profit.

3. Large Company (30% Tax)

  • Turnover: Above ₦100 Million.
  • Rate: 30% of taxable profit.

Essential Incentives & Exemptions

The government provides several incentives to encourage investment:

  • Pioneer Status: A tax holiday of 3-5 years for companies in designated industries (e.g., agriculture, manufacturing).
  • Export Incentives: Profits generated from export activities may be exempt if proceeds are repatriated and used for purchasing raw materials/plant equipment.
  • Gas Utilization: Companies in downstream gas operations enjoy a 5-year tax holiday.

Filing Your Returns

Every company must file annual returns, even if you made no profit.

Deadline:

  • Six (6) months after your company's financial year-end.
  • Example: If your year ends Dec 31st, you must file by June 30th.

How to File:

  1. Prepare Accounts: Have your Audited Financial Statements ready (required for Medium/Large companies).
  2. Log in to TaxPro-Max: The FIRS e-filing platform.
  3. Complete Forms: Fill in the CIT return forms and upload your computation schedules.
  4. Pay: Generate a Remita Retrieval Reference (RRR) and pay online or at a bank.

Penalties: Why Speed Matters

Don't let fines eat into your profits.

  • Late Filing: ₦25,000 in the first month and ₦5,000 for every subsequent month.
  • Late Payment: 10% penalty plus interest at the CBN rate.

Frequently Asked Questions

Do I pay CIT if I made a loss?

No, you don't pay tax on a loss. However, minimum tax rules may apply if you have turnover but no taxable profit (exempting small companies).

I just registered my company. When do I file?

You must file within 18 months of incorporation or 6 months after your first accounting period, whichever comes first.

References & Resources