- What is Companies Income Tax (CIT)? CIT is tax on the profits of incorporated entities in Nigeria. It also includes the tax on profits of non-resident companies who accrue or derive profits from Nigeria or bring or receive their income in Nigeria. It is therefore commonly referred to as corporate tax. CIT was created by the Companies Income Tax Act (CITA or the Act), it is one of the taxes administered and collected by the Federal Inland Revenue Service (“FIRS” or “the Service”)
2. How is CIT Computed? CIT Computation is done for each year of assessment separately, it is computed generally on preceding year basis except in the instances of: commencement of business operation, cessation of business operation and change of accounting date, in which case, the actual year basis of computation could be employed.
3. The profit (Profit before Tax) in the Audited Financial Statement (AFS) is taken and adjusted for non-tax items. In doing this, cognizance is taken of the general rule of deductibility of business expense as described in CITA.