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Company Income Tax

Companies Income Tax (CIT) is the tax on the profits of incorporated entities in Nigeria. It also includes the tax on the profits of non-resident companies carrying on business in Nigeria. The tax is paid by limited liability companies inclusive of the public limited liability companies. It is therefore commonly referred to as a corporate tax.

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Nigeria Company Income Tax

CIT was created by the Companies Income Tax Act (CITA) 1979 and has its root from the Income Tax Management Act of 1961. It is one of the taxes administered and collected by the Federal Inland Revenue Service (‘FIRS’ or ‘the Service’). The tax contributes significantly to the revenue profile of the Service. In 2016, the revenue target for Companies Income Tax is N1.877 trillion representing approximately 40% of the total projected tax revenue of N4.957 trillion for the year.

In filing for Companies Income Tax, audited financial statements is statutorily required. This necessitates the engagement of External Auditors to prepare and/or certify the accounts to be submitted. The returns should mandatorily be accompanied by the tax computations and capital allowances computations on the qualifying assets of the company. The requirement for filing does not discriminate between small, medium or large taxpayers. To many taxpayers therefore, CIT is a complicated kind of tax, difficult to understand and to comply with.