FIRS: Small companies must file returns despite zero percent tax

By Israel Ojoko  November 26, 2025

Beginning 2026, “small companies” will carry a zero percent corporate income tax (CIT) liability meaning they won’t owe any tax. 

However, “zero percent” tax is not the same as an exemption. Firms must still compute their taxable income (i.e. assess profits, deduct allowances and losses, etc.) and submit a self-assessment return to FIRS. 

Failure to file returns could put companies at risk of penalties even if no tax is due. 

Small companies under the revised criteria announced by FIRS:

Annual turnover must be up to ₦100 million. 

Fixed assets should not exceed ₦250 million. 

For firms meeting these limits: CIT (and capital gains tax) is 0% from 2026 onward. 

Previously, smaller thresholds applied (e.g. ₦25 million turnover), so this marks a widening of eligibility for the zero‑percent CIT bracket. 

For small business owners/startups: This could lower tax burden and ease financial pressure, since you may pay no corporate tax on profits/capital gains.

But the requirement to file returns still stands. “Zero tax” doesn’t equal “no paperwork”. Non‑compliance could trigger administrative penalties under the upcoming Nigerian Tax Administration Act 2025 (when it takes effect). 

The rule affects all companies, including those making no profit or operating at a loss you should still file “nil” or “loss” returns.

Ensure you know whether your firm qualifies under the ₦50 M turnover / ₦250 M fixed‑asset threshold.

Prepare to track and compute profits, losses, capital allowances, etc. even if expecting zero tax.

File the mandatory return for 2026 (and each year thereafter), even if tax payable is zero — i.e. do not assume “zero tax = no filing”.

Keep proper books and records to support self‑assessment calculations, as required by the law.