The Nigerian Tax Administration Act, 2025, has clarified that several critical sectors of the economy remain exempt from Company Income Tax (CIT), irrespective of their corporate structure or revenue threshold.
Under the new law, schools, hospitals, pharmaceutical companies, and producers and sellers of basic food items are not required to pay Company Income Tax, even if they are registered as Limited Liability Companies (Ltd) and generate more than ₦100 million in annual revenue.
The Act stipulates that while these entities must file their annual tax returns, they are under no obligation to remit CIT to tax authorities.
According to the provisions of the law, the primary statutory tax obligation applicable to most organizations within these exempt categories is Withholding Tax (WHT). This applies only to payments made to vendors who provide services on a regular basis.
Tax experts have warned institutions operating in these sectors to be cautious of aggressive or fraudulent tax consultants who may attempt to pressure them into paying taxes that are not supported by the law.
They advised affected organizations to properly understand the provisions of the Act, ensure accurate compliance with filing requirements, and avoid exposing themselves to unnecessary financial liabilities.
“Knowing the law, complying correctly, and operating in peace is the safest approach,” the experts said, emphasizing that adequate awareness is essential to preventing unlawful tax demands.
