Small entrepreneurs and businesses across Nigeria have reportedly been celebrating ahead of the new Finance Bill waiting to be signed into law by President Muhammadu Buhari.
According to the present law, Company Income Tax [CIT] rate in Nigeria is 30%.
However, in line with the incoming law, all companies with annual turnover less than N25 million will be exempted from paying CIT (ie CIT Rate = 0%)
Also, all companies with annual turnover between N25 – 100m will pay 20% CIT
As at today, all companies are charged CIT at 30% regardless of size.
When the Finance Bill is signed, however, companies with turnover of N25m will have 0% CIT.
Companies with N25–N100 million turnover will face 20% CIT.
Then, only companies with turnover of N100 million and above will pay 30% CIT.
Noteworthy, meanwhile, is the fact that CIT is charged only on corporate profits not turnover.
Following the announcement, the Presidency said that “the Buhari – Osinbajo administration would continue its determined pursuit of reforming Nigeria’s business environment until the full attainment of the objectives.”
It could be recalled that in the 2017 World Bank Doing Business Ranking, Nigeria moved up 24 places and was also listed among the top ten reforming economies in the world.
In 2019, the World Bank also named Nigeria one of the top-20 improvers in doing business out of 190 countries.
