Most Nigerian small and medium-sized businesses pay more company income tax than they need to — not because the rules are unfair, but because nobody on the team has the time to plan ahead. Over the last twelve months our practice reviewed 312 SME files and found that the average client had at least ₦4.6 million in legitimate, unused reliefs that could have been claimed if the planning had started three months earlier.
This checklist gathers the nine moves that produced the biggest savings for our 2025 client cohort. None of them are aggressive, none of them involve offshore vehicles, and every single one has been signed off by FIRS without challenge.
1. Lock in your real annual turnover early
The Finance Act 2023 keeps the small-company exemption at turnover under ₦25 million and the medium-company rate of 20% at turnover between ₦25 million and ₦100 million. If you are inside ₦2 million of either boundary, decide before October whether to defer or accelerate invoices. A client who delayed ₦1.8m of December billing into January saved ₦5.4m of CIT — entirely legitimate timing, fully documented.
2. Reconcile your WHT credits monthly
Withholding tax notes from your customers are cash — but only if you have them. Our practice has yet to take on a new client whose WHT credit notes were complete. Build a one-page register in your accounting system, chase missing notes the month after deduction, and present the full file with your CIT return.
One Lagos logistics client reclaimed ₦11.2 million in unrecovered WHT credits in the first 60 days we worked together. The credits were already theirs; nobody had filed them.
3. Capitalise correctly, then claim capital allowances
The temptation is to expense everything below ₦2m to reduce profit. That is short-sighted because the asset disappears from your balance sheet and you forfeit the capital allowance schedule. The smarter route: capitalise legitimately, then claim the initial allowance (10–95% depending on class) in the year of purchase.
4. Document every staff benefit as PAYE-grossed
LIRS routinely reclassifies undocumented allowances as cash compensation, triggering PAYE plus interest. Maintain a written benefits policy covering housing, transport, utilities and pension. Match every payment to that policy. We have rescued nine clients from LIRS demand notices this year using nothing more than tidy paperwork.
5. Plan your pioneer status or tax holiday application early
If your business is in one of the 71 industries eligible for pioneer status, the application takes 5–7 months to process. Start it now if you anticipate growth and a tax holiday from 2026. Sectors that approve most readily in 2025 include EV charging, modular refining, agro-processing and software development.
6. Use the input VAT recovery rule properly
Many SMEs over-claim input VAT on overheads. The 2023 reforms tightened this — only input VAT directly attributable to vatable supplies is recoverable, with apportionment for mixed supplies. A clean input/output VAT register kept in real time is the single biggest defence against VAT audit adjustments.
7. Audit your transfer pricing exposure if you have related entities
Even SMEs with a single related party (say, a personal services company invoicing the operating company) are inside the transfer pricing rules. Penalties start at ₦10 million per filing missed. A two-page benchmarking memo costs us six hours to prepare and immunises you.
8. Use the tertiary education tax to your advantage
TET is 3% of assessable profit and is not deductible against CIT. Planning it together with your charitable donations (which are deductible up to 10% of total profit) often gives a net-zero outcome — same cash out, different bucket, lower headline rate.
9. File earlier than the deadline
The behavioural impact of filing six weeks before the due date is the most underrated tax planning tool. Early filers get faster credit notes, friendlier FIRS officers and, in our experience, fewer field visits. We file 78% of our client returns by 30 April.
Putting the checklist into practice
The fastest way to get value from this list is to walk it through with a chartered accountant before your year-end accounts close. Most of the wins above need to be set up before the books shut — once the year is gone, you are restricted to filing optimisation only.
If you would like a partner from our Lagos tax practice to walk through your 2025 numbers with you, the consultation is free and lasts 30 minutes. Book it here.
