What the 2026 tax reform actually changed for small companies

The Nigeria Tax Act 2025 and its companion legislation took effect January 1, 2026, and consolidated a genuinely sprawling set of statutes into a smaller, clearer set of rules. For small companies specifically, the pitch is straightforward: significant tax relief. The detail is where founders get tripped up.

There are two separate thresholds doing two separate jobs, and secondary sources currently disagree on the exact figures for each — which is itself worth knowing, since it means the safest move is confirming directly with the Nigeria Revenue Service before treating any number as final.

The 'small company' classification governs Companies Income Tax, Capital Gains Tax, and the new Development Levy. Qualifying small companies pay a 0% rate on all three. The 'small business' classification, defined separately under the Tax Administration Act, governs whether you need to register for and charge VAT at all. They sound like the same test. They aren't, and a company can qualify under one and not the other.

Both classifications carry a carve-out that catches people off guard: professional service providers are generally excluded, regardless of how small their turnover is. If your business sits in a professional-services category, don't assume the small-company reliefs apply without checking your specific classification.

The other headline change is the Development Levy — a new 4% charge on assessable profits that replaces several older education and IT levies, but only applies to companies outside the small-company exemption. If you're not small enough to be exempt from CIT, you're now also inside this levy, which is a new line item that didn't exist in quite this form before 2026.

Practical takeaway: don't ask 'what's my CIT rate' as if that answers the whole tax picture. Ask it separately for CIT, VAT registration, and the Development Levy, because the 2025 reform deliberately split these into distinct tests with distinct thresholds.