Small Business Taxes in Nigeria
Running a registered company? Here's your guide to business taxation under the Nigeria Tax Act 2025.
Great News for Small Businesses
The 2025 tax reforms are business-friendly:
- 0% CIT for companies with turnover under ₦50 million
- Simplified compliance for small businesses
- Better VAT input credits
Types of Business Taxes
1. Companies Income Tax (CIT)
Rates by company size:
| Company Size | Turnover | CIT Rate |
|---|---|---|
| Small | Under ₦50M | 0% |
| Medium | ₦50M - ₦200M | 20% |
| Large | Above ₦200M | 30% |
Due: Within 6 months of financial year end
2. Value Added Tax (VAT)
Rate: 7.5% on taxable goods and services
Registration: Mandatory if turnover exceeds ₦25 million
What's VAT-able:
- Most goods and services
- Professional fees
What's Zero-rated (0%):
- Exports
- Basic food items
- Educational materials
- Medical supplies
What's Exempt:
- Financial services
- Residential rent
- Public transport
Filing: Monthly, by 21st of the following month
3. Withholding Tax (WHT)
You must deduct and remit WHT when paying:
| Payment Type | Rate |
|---|---|
| Rent | 10% |
| Dividends | 10% |
| Professional fees | 10% |
| Contracts | 5% |
| Directors fees | 10% |
Remit: Within 21 days of deduction
Employee-Related Taxes
PAYE
- Deduct from employee salaries
- Remit by 10th of following month
- Annual returns by January 31
Pension
- Employer contributes 10%
- Employee contributes 8%
- Remit within 7 days of salary payment
NHF
- 2.5% of employee basic salary
- Deduct and remit to FMBN
NSITF
- 1% of employee gross salary
- Employer bears the cost
ITF
- 1% of annual payroll
- If you have 5+ employees or payroll > ₦50M
Tax Calendar
| Month | Due |
|---|---|
| 10th monthly | PAYE remittance |
| 21st monthly | VAT returns |
| 21st monthly | WHT remittance |
| January 31 | Annual PAYE returns |
| March 31 | Personal tax returns |
| June 30 | CIT (Dec year-end) |
Compliance Tips
- Keep proper books - QuickBooks, Zoho, or even Excel
- Separate personal and business - Use a business account
- Collect all receipts - Digital storage is fine
- File on time - Penalties add up fast
- Use technology - Our calculators help estimate liabilities
Use Our Business Tools
- CIT Calculator - Estimate company tax
- VAT Calculator - Calculate VAT on transactions
- Employer Cost - Full cost of hiring
- Vendor Compliance - Check vendor TIN status