Firs: Small Businesses Must Still File Full Tax Returns Despite Zero Tax From 2026

The Federal Inland Revenue Service (FIRS) has announced that beginning in 2026, small businesses will continue to complete full tax computations and file returns, even though they will not be required to pay income tax.

Speaking during a webinar, FIRS Deputy Director Kehinde Kajesomo said the process will still involve calculating assessable profits, deducting capital allowances and losses, and determining taxable profit before applying a zero percent tax rate.

He explained that the definition of a small company has been revised upward, with the turnover threshold increased from N25 million to N50 million and fixed assets capped at N250 million. Companies that meet both criteria will pay zero percent corporate income tax, including zero percent capital gains tax.

For other companies, the corporate income tax rate remains 30 percent, though the president may reduce it to 25 percent based on advice from the National Economic Council (NEC).

Kajesomo also clarified that capital gains tax was not increased from 10 percent to 30 percent; instead, tax treatment now depends on company size and overall profit position. He added that new personal income tax bands apply only to income above each threshold, not entire earnings.

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The federal government recently reaffirmed that only small businesses will be exempt from the 30 percent corporate income tax rate