Being a "small company" under the new tax law sounds like a simple box to tick. The turnover figure that decides it depends on which copy of the Act you are reading.
What the exemption covers
A company that meets the small-company definition is exempt from companies income tax, capital gains tax and the development levy. That is a real exemption, not a lower rate, for company income tax, capital gains tax and the new development levy.
It sits well above the old threshold too. The previous rule under the repealed Companies Income Tax Act capped small-company status at ₦25 million, a fraction of either figure now in play.
The turnover test, and its two figures
Here is where it gets genuinely unsettled. The gazetted text of the Nigeria Tax Act sets the turnover limit at ₦50 million. The National Assembly's own certified copy of the same Act reportedly sets it at ₦100 million instead.
Both are official documents. Neither is a leaked draft or a rumour. The Chairman of the Nigeria Revenue Service (NRS), formerly FIRS, has said publicly that the NRS applies the gazetted law, meaning the ₦50 million figure, but the discrepancy itself has not been resolved.
If your turnover sits between the two figures, this is not a question our facts can settle for you. Ask an accountant which version your specific filing should follow.
The fixed assets test
Turnover is not the only test. A company must also keep fixed assets at or below ₦250 million. Both the gazetted text and the National Assembly's certified copy agree on this figure, so it is one part of the definition that is not in dispute.
Both conditions apply together. A company under the turnover limit but over the fixed-assets limit does not qualify as small.
A separate "small business" test under the NTAA
Do not confuse this with a different figure from a different Act. The Nigeria Tax Administration Act separately defines a "small business" at a turnover of ₦100 million, mainly in the context of tax administration rather than the company income tax exemption itself.
A business can fall under that NTAA definition and still not qualify as a small company for the exemption covered here, if its turnover sits above the gazetted ₦50 million figure. The two tests answer different questions, even though the numbers look similar.
Who is excluded from it
The gazetted text also says businesses providing professional services cannot be small companies. Commentary points to law firms, medical practices, accounting and consulting firms as the kind of business this rule targets.
Here too, the two versions diverge. The National Assembly-certified text reportedly does not repeat this carve-out, which is an open question rather than a settled one, alongside the turnover figure itself.
Reassessing your status each year
Turnover and fixed assets both move year to year, so a company that qualified as small last year might not qualify again. Check both tests annually rather than assuming last year's answer still holds.
Why filing still matters even if exempt
An exemption from tax is not an exemption from filing. Every taxable person must file a return each year, even if no tax is due, and that duty applies to an exempt small company just as it does to any other registered business.
A tender or a bank may also ask for a tax clearance certificate regardless of whether your company owes tax this year. Read what a tax clearance certificate is if you are unsure whether you need one, or start a request once you know you do.
For the Act this exemption sits inside, read the Nigeria Tax Act 2025 explained. For the dispute behind the two turnover figures, see our piece on the gazette dispute.