Am I a small company?

There is no single answer, and that is not a dodge. Two of the 2025 Acts define "small" differently, both are gazetted, and both are in force. Which one applies depends on which tax you are asking about.

If you take one thing from this page: you can be a small business for VAT and not a small company for income tax at the same time. Most summaries you will read miss this.

The two thresholds

For income tax, the Nigeria Tax Act s.202 sets the small-company turnover cap at ₦50 million.

For VAT, the Nigeria Tax Administration Act s.147 sets the small-business turnover cap at ₦100 million.

They do not agree. Nobody has resolved it, and we are not going to pick one for you. A company turning over ₦75m is squarely in the gap: VAT-exempt, and paying 30% companies income tax. Most secondary sources quote ₦100m for both and would tell that company it owes no CIT. It does.

The income-tax test — all three must hold

To be a small company for income tax, you must pass every one of these:

1. Turnover of ₦50m or less in the year.
2. Fixed assets of ₦250m or less. This test is new in 2026. It did not exist under the old regime, where turnover alone decided it.
3. You are not a professional services firm. Law, accountancy, consultancy, engineering and similar practices are excluded from small-company status outright, whatever their turnover. A two-person consultancy turning over ₦10m is not a small company.

Fail any one of the three and you are not small. There is no partial credit and no middle tier.

What small-company status is worth

Companies income tax at 0% instead of 30%. That is the whole of it, and it is a lot.

No development levy. The 4% levy on assessable profit does not apply to small companies. Note that the levy's base is assessable profit — before capital allowances — so it bites even when taxable profit after allowances is thin.

Relief from withholding obligations, conditionally. A small company does not have to deduct WHT on a payment where all three of these hold together: you are a small company, the total value of transactions with that vendor in the month is under ₦2,000,000, and the vendor has a valid TIN. Fail any one — vendor has no TIN, or the month's transactions cross ₦2m — and the obligation revives for that payment. See WHT: final tax or credit?.

You still have to file. Small-company status removes tax, not the return.

What the VAT test does

To be a small business for VAT you need turnover of ₦100m or less and fixed assets of ₦250m or less.

Being a small business for VAT means you are not required to register, charge or file. But read zero-rated vs exempt VAT before you treat that as a win — if your customers are VAT-registered businesses, staying out of the system means you absorb the input VAT on your own costs instead of reclaiming it.

The gap in one table

| Your turnover | Companies income tax | VAT | | --- | --- | --- | | Up to ₦50m | Small — 0% | Small business — no obligation | | ₦50m to ₦100m | Not small — 30% | Small business — no obligation | | Above ₦100m | Not small — 30% | Must register, charge and file |

This assumes fixed assets stay at or below ₦250m and you are not a professional services firm. Fail either of those and the middle column reads 30% at any turnover.

The cliff is real, and it is steep

There is no taper. At ₦50,000,000 of turnover your companies income tax is zero. At ₦50,000,001 you are a 30% taxpayer on your total profits, and you owe the 4% development levy on assessable profit as well.

That is not a rounding difference. A company that crosses the line late in the year by a small margin can find the crossing costs more than the revenue that caused it. This is worth modelling before you take the order, not after — the small-company threshold monitor shows your headroom against both caps and what crossing each one costs.

The same cliff exists at ₦250m of fixed assets, and it catches people out more often, because assets accumulate quietly. Buy the building and your turnover has not moved, but your tax rate has.

What changed from 2025

Under the old regime the income-tax thresholds were: small at ₦25m turnover or less (0%), medium between ₦25m and ₦100m (20%), large above ₦100m (30%). There was no fixed-asset test and professional services were not excluded.

So the reform did three things at once: it raised the small cap from ₦25m to ₦50m, it deleted the 20% medium band, and it added two new ways to fail. If you were a medium company paying 20%, you now pay 30%. If you are a professional services firm that was small, you now pay 30%. Both are losses, and both are easy to miss, because the headline — "the small-company threshold doubled" — sounds like good news.

Work out your own position

The CIT calculator and small-company checker runs both classifications and tells you when they diverge. The development levy calculator applies the 4% to the correct base. The VAT return preparer applies the ₦100m test.

Every figure on this page comes from our rate reference, which reads them from configuration rather than prose. Read the disclaimer before acting on any of it — where the law contradicts itself, as it does here, that matters more than usual.