AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
From 1 January 2026, a small company pays company income tax at 0% and every other company at 30% (Nigeria Tax Act 2025, section 56); the Act lets the President reduce the 30% to 25% by order. Large companies and members of big multinational groups must also pay at least a 15% effective tax rate, and companies other than small and non-resident companies pay a 4% development levy on assessable profits.
Company tax rates at a glance (as of October 2026)
| Charge | Who pays | Rate or rule | Section |
|---|---|---|---|
| Company income tax | Small company | 0% | NTA s.56(a) |
| Company income tax | Any other company | 30% from commencement; 25% from a date set by presidential order on National Economic Council advice | NTA s.56(b) |
| Minimum effective tax rate | MNE group members with group turnover of at least €750m; other companies with turnover of ₦50bn or more | Top-up to 15% of net income | NTA s.57 |
| Development levy | All companies except small and non-resident companies | 4% of assessable profits | NTA s.59 |
| Chargeable gains | Companies | Included in total profits, so taxed at the company rate | NTA s.27(1) |
What is a small company?
Two definitions sit in the 2025 laws, and they differ in one respect.
| Law | Turnover test | Fixed assets test | Professional services |
|---|---|---|---|
| Nigeria Tax Act 2025, s.201 ("small company") | Gross turnover of ₦100,000,000 or less a year | Total fixed assets not exceeding ₦250,000,000 | Not mentioned in the gazetted text |
| Nigeria Tax Administration Act 2025, s.147 ("small business") | Gross turnover of ₦100,000,000 or less a year | Total fixed assets not more than ₦250,000,000 | A business providing professional services is not a small business |
The NTAA definition governs the VAT registration and filing relief in NTAA section 22. A professional services firm should not assume small company status for CIT without advice, given the difference. Small companies may file a statement of accounts attested by the taxpayer instead of audited financial statements (NTAA s.11(1)(b)). Our earlier guide, small company tax under the Nigeria Tax Act 2025, covers the practical side.
The 15% minimum effective tax rate
Section 57 sets a floor. If a company in scope has covered taxes below 15% of its net income in a year, it must recompute and pay additional tax to bring the rate to 15%.
- Covered taxes: company income tax, petroleum profits tax and hydrocarbon tax paid or payable, development levy and priority sector tax credit.
- Net income: profit before tax in the audited financial statements, excluding franked investment income and unrealised gains or losses. Life insurers exclude policyholders' gross and investment income.
- In scope: a constituent entity of a multinational group with aggregate group turnover of at least €750 million, and any other company with aggregate turnover of ₦50 billion or more in the financial year.
- Free zones: the floor does not apply to an approved free zone enterprise's approved activities, except sales into the customs territory or where the enterprise is part of a group above the €750 million threshold.
- The NRS may issue regulations and may set a higher turnover threshold than ₦50 billion.
Deduction limits worth knowing
| Item | Limit | Section |
|---|---|---|
| Interest paid to connected persons | Excess over 30% of EBITDA is disallowed; carry forward up to five years. Banking and insurance subsidiaries of foreign companies are excluded | NTA Third Schedule |
| Donations to approved bodies | Up to 10% of profit before tax | NTA s.163(5) |
| Research and development | Up to 5% of turnover | NTA s.164(2) |
| Low-income wage awards and net new hires (2023 to 2025 costs) | Additional 50% deduction, subject to conditions | NTA s.162(3) |
Capital allowances follow Part I of the First Schedule. Section 27(2) adds a condition: where VAT was due but not charged on an asset, or import duty was not paid on an imported item, the cost is not qualifying capital expenditure.
Worked example (illustrative figures)
A Lagos manufacturer, not small, has assessable profits of ₦400,000,000 and total profits after capital allowances of ₦320,000,000.
- Company income tax: 30% × ₦320,000,000 = ₦96,000,000.
- Development levy: 4% × ₦400,000,000 = ₦16,000,000 (the levy is on assessable profits).
- Turnover is below ₦50 billion and it is not in a large multinational group, so the 15% floor does not apply.
- Total of the two charges: ₦112,000,000. If the same company had turnover of ₦100 million or less and fixed assets of ₦250 million or less, both lines would be nil, although it would still have to file a return.
The same arithmetic applies whatever the sector, except for companies in petroleum operations, export processing and free trade zones, insurance, lottery and gaming, collective investment schemes and mining, which have their own rules in Part XI of Chapter Two and in Chapter Three of the Act.
Returns and payment
Every company, including an exempt or small one, files a self-assessment return at least once a year (NTAA s.11). The return is due within six months of the end of the accounting year; a new company files within 18 months of incorporation or six months after its first accounting period, whichever is earlier. Tax is paid by the filing date, in one sum or instalments (NTAA s.49). See the 2026/2027 tax calendar and the development levy guide.
How we put this together
We read the gazetted texts of the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025 (Official Gazette No. 117, Vol. 112, dated 26 June 2025) section by section. The Nigeria Revenue Service website lists these Acts on its laws page, but its topic pages load in the browser and could not be read by our tools, so we worked from copies of the Gazette hosted by a third party and checked figures against the section and schedule numbers quoted here. Regulations, practice notes and orders issued after the Acts may change how a rule applies; where something depends on an order or regulation we say so. The example is ours and uses invented figures.
Questions people ask
What is the company income tax rate in Nigeria in 2026?
30% for companies that are not small, and 0% for small companies, under section 56 of the Nigeria Tax Act 2025. The Act allows the 30% to be cut to 25% by presidential order.
What is a small company under the Nigeria Tax Act 2025?
A business with gross turnover of ₦100 million or less a year and total fixed assets not exceeding ₦250 million. The Tax Administration Act's small business definition also excludes professional services firms.
Who pays the 15% minimum tax in Nigeria?
Companies in multinational groups with group turnover of at least €750 million, and other companies with turnover of ₦50 billion or more. They top up to 15% of net income if covered taxes fall short.
Do small companies pay development levy?
No. Section 59 of the Nigeria Tax Act 2025 excludes small companies and non-resident companies from the 4% development levy.
Sources
- Nigeria Tax Act, 2025 (Act No. 7), Official Gazette No. 117, Vol. 112, 26 June 2025 (gazetted copy) · accessed Oct 2026
- Nigeria Tax Administration Act, 2025 (Act No. 5), Official Gazette No. 117, 26 June 2025 (gazetted copy) · accessed Oct 2026
- Nigeria Revenue Service: Laws and regulations · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.