CIT Computations¶
Last reviewed: 2026-04-01 · Nnamdi
Status: Complete
Route: /tax/cit-computations
1. What is it?¶
CIT Computations is the module for calculating Company Income Tax liability for a given financial year. It takes the business's revenue, total assets, and profit before tax (auto-populated from the Chart of Accounts), applies tax adjustments (add-backs for accounting depreciation, deductions for capital allowances), and determines the CIT payable based on the company's size classification. Small companies (Revenue ≤ ₦100M and Assets ≤ ₦250M) are exempt at 0% CIT; large companies pay 25% CIT + 4% Development Levy.
2. How does it work in Finora?¶
2.1 The CIT Computations page (/tax/cit-computations)¶
Header: - Heading: "CIT Computations" - Subtitle: "Manage Company Income Tax computations and filings" - New Computation button
Company Size Classification info box: - Small Companies (Revenue ≤ ₦100M AND Assets ≤ ₦250M): 0% CIT - Exempt - Large Companies (Revenue > ₦100M OR Assets > ₦250M): 25% CIT + 4% Development Levy
Important threshold note: The CIT Computations page displays ₦100M as the revenue threshold for "Small Companies." However, NTA 2025 §56 defines the small company CIT exemption threshold as ₦50M turnover. The ₦100M figure shown here is the VAT registration threshold (NTAA 2025 §147), not the CIT exemption threshold. Businesses with turnover between ₦50M and ₦100M should be aware that they may owe CIT at 25% despite being shown as "small" on this page. See the Tax Compliance article for the full threshold analysis. This discrepancy has been flagged for correction.
KPI summary strip (test business):
| Metric | Value |
|---|---|
| Total Computations | 0 |
| Draft | 0 |
| Total CIT Liability | ₦0.00 |
| Total Tax Liability | ₦0.00 |
CIT Computation History: - Refresh button - Empty state: "No CIT computations yet — Create your first Company Income Tax computation" - Create First Computation button in empty state
2.2 New CIT Computation panel¶
Clicking New Computation opens a right-hand panel:
- Heading: "New CIT Computation"
- Subtitle: "Calculate Company Income Tax for a financial year"
Financial Year selector¶
| Field | Options |
|---|---|
| Financial Year | 2023 / 2024 / 2025 / 2026 (defaults to 2025) |
"Financial data will be auto-populated from your accounts"
Financial Figures section¶
| Field | Required | Source |
|---|---|---|
| Annual Revenue | Yes | From Profit & Loss statement |
| Total Assets | Yes | From Balance Sheet |
| Profit Before Tax | Yes | Net profit from P&L statement |
- Refresh from accounts button — re-populates figures from the latest GL data
Tax Adjustments (Optional) section¶
| Field | Description |
|---|---|
| Add-backs | Accounting depreciation (auto-filled from Fixed Assets) — depreciation is not deductible for CIT |
| Deductions | NTA 2025 capital allowances (auto-filled from Fixed Assets) — replacing accounting depreciation |
- Calculate from Fixed Assets button — auto-fills add-backs and deductions from the Fixed Assets register
Action buttons: - Cancel — closes the panel - Create Computation — creates the computation (disabled until required fields are filled)
2.3 CIT computation logic¶
The computation follows this flow:
Profit Before Tax
+ Add-backs (accounting depreciation — not deductible)
− Deductions (capital allowances — tax-deductible)
= Adjusted Profit (Taxable Profit)
If Small Company (Revenue ≤ threshold AND Assets ≤ ₦250M):
CIT = ₦0 (0% — exempt)
Development Levy = ₦0
If Large Company:
CIT = Adjusted Profit × 25%
Development Levy = Adjusted Profit × 4%
Total Tax Liability = CIT + Development Levy
3. Business rules & constraints¶
| Rule | Detail |
|---|---|
| Annual computation | CIT is calculated per financial year, not monthly |
| Auto-population from GL | Revenue, assets, and profit are pulled from the Chart of Accounts |
| Capital allowances replace depreciation | Accounting depreciation is added back; NTA 2025 capital allowances (Initial Allowance + Annual Allowance) are deducted instead |
| Fixed Assets integration | Add-backs and deductions can be auto-calculated from the Fixed Assets register |
| Small company exemption | 0% CIT if within thresholds — no tax payable |
| Development Levy (4%) | Applies only to large companies; replaces the former TET + IT Levy + NASENI + Police Trust Fund levies |
| CIT rate is 25% | Reduced from 30% under the old CITA; effective from Year of Assessment 2026 (NTA 2025) |
4. Nigerian regulatory context¶
CIT under NTA 2025¶
- Standard rate: 25% (down from 30% under CITA)
- Small company rate: 0% (exempt under NTA 2025 §56)
- Assessment year: Year of Assessment 2026 is the first year under the new rates
- Due date: Self-assessment payment and filing within 6 months of the financial year-end
Small company definition (NTA 2025 §56)¶
- Annual turnover ≤ ₦50M AND gross fixed assets ≤ ₦250M
- Exempt from CIT, CGT, and Development Levy
- PSOs (Professional Services Organisations) are excluded — regardless of turnover
Capital allowances vs accounting depreciation¶
Nigerian tax law does not allow accounting depreciation as a deduction for CIT purposes. Instead, businesses claim: - Initial Allowance (IA): One-time deduction in the year of acquisition (rates: 15%–95% depending on asset class) - Annual Allowance (AA): Recurring annual deduction (rates: 10%–25% depending on asset class) - These replace depreciation and are typically more generous in early years
Development Levy (4%)¶
The NTA 2025 consolidated four former levies into a single 4% Development Levy: - Tertiary Education Tax (TET, formerly 2.5%) - Information Technology Development Levy (1%) - NASENI Levy (0.25%) - Police Trust Fund Levy (0.005%)
Only large companies (above the small company threshold) pay the Development Levy.
5. Common customer questions¶
Q: "My CIT computation shows ₦0 liability. Is that correct?"
If your business qualifies as a small company (turnover ≤ ₦50M and assets ≤ ₦250M), yes — 0% CIT is correct. The computation will show the exemption. If your business exceeds these thresholds, escalate to Tier 2 for investigation.
Q: "What are 'add-backs' in the tax computation?"
Add-backs are expenses that were deducted in your P&L but are not allowed as deductions for CIT. The main one is accounting depreciation — Nigerian tax law requires you to use capital allowances instead. Finora auto-fills the depreciation figure from your Fixed Assets register.
Q: "What are capital allowances and how do I claim them?"
Capital allowances are the tax-equivalent of depreciation. Instead of deducting the accounting depreciation you recorded in your books, you deduct the Initial Allowance and Annual Allowance rates prescribed by NTA 2025 for each asset category. Click "Calculate from Fixed Assets" in the computation form to auto-calculate these from your fixed asset register.
Q: "The page shows ₦100M as the small company threshold. I thought it was ₦50M?"
The ₦100M figure shown on the CIT Computations page is the VAT registration threshold (NTAA 2025 §147). The actual CIT exemption threshold under NTA 2025 §56 is ₦50M turnover. If your revenue is between ₦50M and ₦100M, you may owe CIT at 25% despite the display suggesting exemption. This display discrepancy has been flagged.
6. Known edge cases¶
₦100M vs ₦50M threshold discrepancy¶
The Company Size Classification box on this page shows "Small Companies (Revenue ≤ ₦100M)" — but the actual CIT exemption threshold under NTA 2025 §56 is ₦50M. The ₦100M figure is the VAT threshold. Businesses in the ₦50M–₦100M band may be incorrectly classified as "small" for CIT purposes. This is the same discrepancy documented in the Tax Compliance Dashboard article and should be raised with Tier 3 for a UI fix.
Capital allowances require Fixed Assets data¶
If no fixed assets are recorded, the "Calculate from Fixed Assets" button will produce ₦0 for both add-backs and deductions. This is correct if the business has no depreciable assets, but may confuse businesses that do have assets but haven't recorded them in Finora's Fixed Assets module.
No "medium company" tier shown¶
The page shows only Small and Large — there is no medium tier displayed. Under NTA 2025, the 25% CIT rate applies to all non-small companies regardless of whether they are "medium" or "large."
7. Escalation trigger¶
Escalate to Tier 3 (Founder) if: - CIT computation produces clearly incorrect figures - Auto-population from accounts shows wrong revenue/assets/profit - The ₦100M threshold display needs to be corrected to ₦50M
Escalate to Tier 2 (Support Lead) if: - Customer needs help understanding capital allowances and add-backs - Customer is unsure whether they qualify as a small company (especially PSOs) - Customer needs guidance on when to file the CIT computation with NRS - Customer wants to adjust a computation after creation
8. Last reviewed¶
2026-04-01 — Nnamdi. Verified against production. CIT Computations page for COA Test School Academy: Total Computations 0 / Draft 0 / Total CIT Liability ₦0 / Total Tax Liability ₦0. Company Size Classification: Small (≤₦100M + ≤₦250M) = 0% exempt / Large (>₦100M OR >₦250M) = 25% + 4%. ₦100M threshold discrepancy noted (should be ₦50M per NTA 2025 §56). New Computation panel captured: Financial Year (2023–2026, default 2025), Financial Figures (Annual Revenue / Total Assets / Profit Before Tax, auto-populated), Tax Adjustments (Add-backs for depreciation / Deductions for capital allowances, auto-filled from Fixed Assets). Refresh from accounts + Calculate from Fixed Assets buttons confirmed. Cancel + Create Computation buttons confirmed.