Nigeria Corporate Tax Calculator 2026

Calculate and understand Corporate Income Tax (CIT) for Nigerian companies under the 2026 tax regime.

The Nigeria Tax Act 2025 introduced a substantially consolidated corporate tax framework, including new company thresholds, a 4% Development Levy and changes to how taxable profits and capital allowances are determined.

This guide explains the basic calculation from business profit to potential corporate tax liability, so you can understand what the numbers actually mean.

What Is Corporate Income Tax in
Nigeria?

Corporate Income Tax (CIT) is a tax on the taxable profits of companies.

For a Nigerian resident company, the tax framework generally applies to its worldwide income, while non-resident companies are subject to Nigerian tax on income connected with their taxable presence or Nigerian-source activities, subject to the applicable rules.

The important distinction is:

Corporate tax is not simply a percentage of turnover.

A company may generate ₦100 million in sales without having ₦100 million of taxable profit.

The calculation starts with the company's financial results and then applies the tax rules governing allowable expenses, adjustments, capital allowances, losses and other relevant items.

What Is the Corporate Tax Rate in 2026?

The standard CIT rate for a company that does not qualify as a small company is 30%.

Qualifying small companies are subject to a 0% CIT rate, provided they meet the statutory conditions.

This makes determining whether a company qualifies as a small company one of the first questions to answer before calculating its final CIT liability.

Small Company vs. Other Companies

The current tax framework provides a 0% CIT rate for qualifying small companies.

The current published 2026 summaries use the following general criteria:

• Annual gross turnover of ₦100 million or less

• Total fixed assets not exceeding ₦250 million

Companies that do not qualify as small companies generally fall under the standard 30% CIT rate.

The classification matters because it can affect more than just the CIT calculation.

For example, qualifying small companies are also excluded from the new Development Levy.

Important: Company classification can depend on the precise statutory definitions and circumstances of the business. Professional-service businesses and certain sectors can have additional considerations, so a turnover figure alone should not automatically be treated as proof of small-company status.

How Is Corporate Tax Calculated?

This is where corporate tax becomes more interesting than simply applying 30% to profit.

A simplified calculation can be thought of as:

Accounting Profit

↓

Tax Adjustments

↓

Assessable Profit

↓

Capital Allowances / Other Applicable Adjustments

↓

Taxable Profit

↓

CIT Liability

The actual calculation can contain additional steps depending on the company, industry and transactions involved.

Step 1: Start With the Company's Financial Records

The calculation begins with the company's accounting records.

This may include:

• Sales and other income

• Operating expenses

• Payroll

• Inventory

• Assets

• Finance costs

• Depreciation

• Investment income

• Other relevant transactions

This is one reason accurate bookkeeping matters.

A tax calculation is only as reliable as the financial information from which it starts.

Step 2: Separate Allowable and Disallowed Expenses

Not every expense appearing in a company's accounts automatically becomes a tax deduction.

Under the corporate tax rules, expenses generally need to satisfy the applicable requirements for deductibility.

For example, expenses incurred wholly and exclusively for the business or trade can generally qualify for deduction, while certain expenses are restricted or disallowed.

This means accounting profit and taxable profit can be different.

For example:

Accounting profit: ₦20 million

Disallowed expense added back: ₦2 million

Adjusted profit: ₦22 million

This is a simplified illustration rather than a complete tax computation.

Step 3: Understand Depreciation vs. Capital Allowances

One of the most important distinctions in corporate tax is the treatment of fixed assets.

Businesses normally record depreciation in their financial statements.

For tax purposes, however, the tax system uses capital allowances rather than simply accepting accounting depreciation as the deduction.

The current framework provides annual capital allowances for qualifying fixed assets, with rates depending on the type of asset.

This means a company's accounting records may show:

Depreciation expense

while the tax computation separately considers:

Capital allowance

The two figures should not simply be treated as interchangeable.

Step 4: Calculate Assessable Profit

Assessable profit is an important intermediate stage in the corporate tax calculation.

A simplified way of thinking about it is:

Accounting profit + tax adjustments = adjusted/assessable profit

The exact computation depends on the relevant provisions and circumstances of the company.

The Development Levy is also based on assessable profit, making this figure important beyond the basic CIT calculation.

Step 5: Apply Capital Allowances and Other Relevant Adjustments

After arriving at the appropriate profit figure, the tax computation considers capital allowances and other statutory adjustments.

This is where the company's asset records become particularly important.

For example, a business purchasing:

• Computers

• Machinery

• Vehicles

• Buildings

• Equipment

may need to maintain records showing when those assets were acquired, their qualifying cost and their use in generating taxable income.

The current rules provide for annual capital allowances calculated on a straight-line basis, with the applicable rate depending on the qualifying expenditure.

The 4% Development Levy

The Nigeria Tax Act introduced a 4% Development Levy for Nigerian companies other than small companies and non-resident companies.

The levy is calculated on assessable profit.

It consolidates several previous earmarked taxes and levies, including the former Tertiary Education Tax, IT levy, NASENI levy and Police Trust Fund levy.

This means that for a company subject to the levy, the overall corporate tax calculation is not simply:

Taxable profit × 30%

There can also be:

Development Levy = Assessable Profit × 4%

subject to the applicable statutory rules.

A Simple Corporate Tax Example

Consider a hypothetical Nigerian company that does not qualify as a small company.

Suppose its simplified tax computation produces:

Assessable profit:
₦50,000,000

Taxable profit after applicable adjustments:
₦45,000,000

CIT

₦45,000,000 × 30%

= ₦13,500,000

Development Levy

₦50,000,000 × 4%

= ₦2,000,000

Simplified combined liability

₦13,500,000 + ₦2,000,000

= ₦15,500,000

This is deliberately simplified.

It does not account for every possible deduction, credit, loss, withholding tax credit, industry-specific rule, incentive or minimum-tax mechanism.

Its purpose is simply to demonstrate why CIT and Development Levy can be calculated from different profit bases.

What About Withholding Tax?

Withholding Tax (WHT) is often confused with corporate income tax.

They are related to the overall tax position of a business, but they are not the same thing.

For example, a client may deduct WHT from a payment made to your company.

That amount can potentially represent a tax credit against the company's final liability, subject to the applicable rules and documentation.

This is why businesses should keep records of WHT deducted from their income rather than treating those deductions as simply lost revenue.

What About Capital Gains?

Capital gains can also form part of a company's tax considerations.

Under the new framework, the CGT rate for companies was aligned with the corporate income tax rate, with chargeable gains generally subject to 30% for companies that are not exempt.

This is another reason a corporate tax calculation should not be reduced to a single "profit × 30%" formula.

The nature of the transaction and the applicable exemptions or rules still matter.

For a more detailed explanation, see our:

Capital Gains Tax Calculator Nigeria 2026

What About Very Large Companies?

The new framework also contains a 15% Minimum Effective Tax Rate (ETR) regime for certain very large companies and multinational groups.

The published guidance identifies companies with annual turnover of ₦50 billion or more, as well as Nigerian companies belonging to multinational groups meeting the €750 million global turnover threshold, among those potentially subject to the minimum ETR rules.

This is primarily relevant to much larger companies and multinational groups.

For most SMEs, it will not be the first calculation they need to worry about.

We therefore recommend treating the standard corporate tax calculation and the large-company minimum ETR rules as separate considerations rather than confusing the two.

Why Your Financial Records Matter

Corporate tax is one of the clearest examples of why businesses need more than a yearly pile of receipts.

A well-maintained financial record can help establish:

• What the business earned

• What it spent

• Which expenses may require tax adjustment

• Which assets it owns

• When those assets were acquired

• What capital allowances may apply

• How much WHT was deducted

• What inventory was held

• How the final tax computation was constructed

The tax return is ultimately an output.

The underlying financial records are what make that output possible.

How TaxMateNG Fits In

TaxMateNG is an independent financial-record and tax calculation application.

It is not affiliated with the Nigerian government and it is not a government tax filing portal.

TaxMateNG is designed to help users maintain financial records and structure supported corporate tax calculations from those records.

For corporate users, the application can help organize information such as:

• Income

• Expenses

• Assets

• Capital allowances

• WHT credits

• Tax adjustments

The goal is straightforward:

Keep the underlying financial information organized so the tax calculation can be understood rather than appearing as a mysterious final number.

TaxMateNG does not replace the Nigeria Tax Act, official tax authorities or professional tax advice.

Corporate Tax Calculator — Important Disclaimer

This page provides general information about Nigerian corporate taxation under the 2026 framework.

Actual tax liability can depend on the company's:

• Industry

• Turnover

• Fixed assets

• Accounting period

• Taxable income

• Allowable expenses

• Capital allowances

• Losses

• Withholding tax credits

• Capital gains

• Tax incentives

• Residency or taxable presence

• Applicable minimum-tax rules

The examples on this page are simplified illustrations and should not be treated as a company's actual tax assessment.

For significant or unusual transactions, consult a qualified Nigerian tax professional and refer to the applicable legislation.

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