Two rates decide what a company pays on its profit under the Nigeria Tax Act 2025. Which one applies comes down to a single question: is the company a small company or not.
The two rates that apply today
A small company pays 0% company income tax. Every other Nigerian company pays 30%, in force since 1 Jan 2026.
There is no rate in between. The Nigeria Tax Act 2025 does not set a separate figure for a medium-sized business, whatever its turnover happens to be.
Why there is no medium-company rate
Some older guides and posts still talk about a middle band for medium-sized companies. The current law does not work that way.
A company is either small, and pays 0%, or it isn't, and pays 30%. Growing past the small-company line does not move a company onto some third rate. It moves straight to the standard one.
That makes the small-company test the only rate decision that matters in practice. A company right on the edge of that line should treat it as a cliff, not a slope.
The 25% rate that is not yet law
The Nigeria Tax Act 2025 sets out a lower rate of 25% for companies that are not small. It is not active.
The lower rate only starts once the President brings it in by order, acting on the advice of the National Economic Council. No such order has been confirmed.
Treat 30% as the rate that applies today. A supplier, an adviser or an online post telling you 25% already applies is ahead of the law, not behind it.
What the small-company rate actually covers
Reaching 0% is not the only benefit of counting as small. Companies income tax, capital gains tax and the development levy are all covered by the same exemption.
A small company is not just taxed at a lower rate, in other words. It sits outside two other charges entirely, for as long as it keeps qualifying each year.
Qualifying is the harder part. The turnover and fixed-assets tests behind the small-company definition are not fully settled between two versions of the same Act. Our piece on the small-company exemption sets out both figures and what to do if your turnover sits between them.
A quick example
Take two companies with different profiles, for example. Company A meets both the turnover and fixed-assets tests for a small company, so it pays 0% company income tax, whatever its profit for the year.
Company B does not meet those tests. If its profit for the year is ₦40 million, for example, it pays 30% of that profit in company income tax, on top of the development levy discussed below.
What a standard-rate company pays besides CIT
30% is not the only charge on profit for a company that is not small. The development levy sits alongside it, worked out on a different base entirely.
Our guide to the development levy covers the rate, what it replaced, and who is excluded from it.
Common mistakes
- Assuming a medium-sized company gets a middle rate. It does not exist under the current law. A company is either small or it is not.
- Applying 25% because a post online said so. The rate is 30% until a presidential order says otherwise.
- Checking turnover alone. The small-company test also looks at fixed assets. Passing one test without the other does not qualify a company as small.
Confirm your own position every year rather than carrying last year's answer forward, since turnover and fixed assets both move. For the wider law both rates sit inside, read the Nigeria Tax Act 2025 explained, and browse the hub on the Nigeria Revenue Service (NRS), formerly FIRS, and Rev360 for more on the 2025 reforms.