Do small companies still need to file tax returns in Nigeria? Yes — and this is the myth quietly costing Nigerian SMEs real money in 2026. The Nigeria Tax Act 2025 exempts qualifying small companies from paying Companies Income Tax, but it does not exempt them from filing a return. Thousands of business owners have collapsed the two ideas into one — "if I owe nothing, I have nothing to file" — and the Tax Administration Act 2025 turns that assumption into an automatic, recurring penalty.
Is It True That Tax-Exempt Small Companies Don't Need to File Returns?
It is one of the most common misreadings of Nigeria's 2025 tax reforms, and an understandable one. The headline coverage of the Nigeria Tax Act 2025 focused on relief: companies with turnover of ₦100 million or less, and fixed assets of ₦250 million or less, now pay 0% Companies Income Tax and are exempt from the Capital Gains Tax that used to apply on the sale of business assets. What that coverage rarely spelled out is that "exempt from tax" and "exempt from filing" are two different things in law, and the Tax Administration Act 2025 treats them separately.
What Does the Nigeria Tax Act 2025 Actually Require?
The filing obligation is explicit and applies regardless of profitability. Every company registered in Nigeria is required to file a tax return at least once a year — with or without a notice from the Nigeria Revenue Service, and whether or not the company is liable to pay any tax for that year of assessment. The obligation even extends to a company that has been granted exemption from incorporation in Nigeria. A small company that qualifies for 0% CIT is not asking NRS for permission to skip a return; it is filing a return that simply shows zero tax due, supported by the accounts and computation that prove it.
Who Qualifies as a 'Small Company' Under the New Law?
The exemption is narrower than many owners assume. To qualify, a company needs annual turnover of ₦100 million or less and fixed assets of ₦250 million or less — both conditions, not either. A business that clears the turnover threshold but owns a warehouse, fleet, or plant that pushes fixed assets past ₦250 million falls outside the exemption regardless of how modest its revenue looks. Qualifying companies must still file within six months of their accounting year-end — for a business with a 31 December year-end, that is 30 June the following year — and the return has to include audited or properly certified accounts, a tax computation showing how the zero liability was arrived at, and documentation supporting the turnover and asset figures being claimed. NRS's compliance monitoring works from that file, not from a company's own assumption that it qualifies.
What Happens If You Don't File?
The penalty is where the myth becomes expensive. Under the Tax Administration Act 2025, a company that fails or refuses to file a required return — or knowingly files an incomplete or inaccurate one — is liable to an administrative fine of ₦100,000 for the first month of default and ₦50,000 for every subsequent month the default continues, a recurring, compounding cost with no filing at all to show for it. A small company that has genuinely paid nothing in tax can still accumulate real penalties simply by treating the exemption as the end of the conversation rather than the start of a filing obligation it still owes.
What This Means for Your Business
For finance leads and owner-managers of small and growing businesses — across construction, agriculture, trade, and professional services — the fix is procedural, not financial. Confirm your company's turnover and fixed asset position against the ₦100 million and ₦250 million thresholds before assuming the exemption applies. Build the annual filing into your compliance calendar the same way payroll deadlines are treated, not as optional because no tax is due. Keep the accounts and computation that support a zero-tax return audit-ready year-round — the same discipline VOG has recommended for NGOs whose exempt status is examined line by line during an NRS audit — and line it up against the payroll-side deadlines in your Tax Act 2025 PAYE compliance calendar. A filing done on time costs nothing. The same filing, done three months late, costs ₦200,000 before anyone even looks at whether tax was owed.
FAQ
Do small companies still need to file tax returns in Nigeria if they owe zero tax? Yes. The Nigeria Tax Act 2025's 0% CIT rate for qualifying small companies removes the tax bill, not the filing obligation. Every company must file at least once a year, whether or not tax is payable, and the return must include accounts and a computation proving the zero-tax outcome.
What is the penalty for late filing of company tax returns in Nigeria? Under the Tax Administration Act 2025, non-filing carries a fine of ₦100,000 for the first month of default and ₦50,000 for every additional month it continues, with no cap stated in the law — a cost that keeps compounding until the return is filed.
What qualifies a company as a 'small company' under the Nigeria Tax Act 2025? A company qualifies as small if its annual turnover is ₦100 million or less and its fixed assets are ₦250 million or less — both conditions must be met. Meeting only one does not qualify the company for the exemption.
VOG Global Consult helps small and growing Nigerian businesses build a compliance calendar that turns "we're exempt" into a filed, audit-ready return every year — not an assumption that catches up with you later. Talk to our team at vog.global before your next filing deadline.