The 4% Development Levy on assessable profit.
Development levy
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Company size
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Levy rate
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One levy in place of four
For years a Nigerian company filing its annual returns paid the company income tax bill and then a cluster of separate education and technology levies stacked on top. The 2025 tax reform folds those into a single Development Levy charged on assessable profit. The levy this calculator models replaces the old Tertiary Education Tax, the NITDA levy that funded information technology development, the NASENI levy, and the Police Trust Fund levy. Instead of four computations on four different bases, a company now works out one charge. Because this is part of the reform package phasing in around 2026, treat the rate and the consolidation as the position this tool applies and confirm the current detail with the Federal Inland Revenue Service before you file.
The rate as modelled here is 4 percent of assessable profit. Assessable profit is your accounting profit adjusted for tax purposes, so it is the same base the levy attaches to year after year, which makes it straightforward to forecast once you know your adjusted profit.
The small-company test that decides everything
Whether you pay the levy at all turns on one question: are you a small company? The calculator answers it with two thresholds that must both be satisfied. Currently, though you should verify the figures with the FIRS, a company counts as small only if its annual turnover is at most NGN 50 million and its total fixed assets are at most NGN 250 million. Note the word both. A firm with NGN 40 million of turnover but NGN 300 million of plant and property fails the assets test and is treated as large, so the levy applies. Companies assessed under the Hydrocarbon Tax regime sit outside this levy entirely.
This matters most to a growing business that crosses one threshold before the other. A trading company can stay under the asset cap for years while its turnover climbs past NGN 50 million, at which point the levy switches on even though its balance sheet looks modest. Watch the line you are closest to, because the levy is binary: you either owe 4 percent of assessable profit or you owe nothing.
A company with NGN 50 million of assessable profit
Take the default inputs. A company reports NGN 50 million of assessable profit, NGN 200 million of turnover, and NGN 120 million of fixed assets. Its turnover alone is well over the NGN 50 million cap, so it is a large company and the levy applies. The charge is 4 percent of the NGN 50 million profit, which is NGN 2,000,000, using the rate this calculator applies.
| Item | Value |
|---|---|
| Annual turnover | NGN 200 million (over the NGN 50m cap) |
| Total fixed assets | NGN 120 million (under the NGN 250m cap) |
| Classification | Large (fails turnover test) |
| Assessable profit | NGN 50,000,000 |
| Levy rate | 4% |
| Development Levy due | NGN 2,000,000 |
Where it sits in the wider tax bill
The Development Levy is not your only obligation. It comes on top of company income tax, which the reform charges at a reduced or zero rate for small companies and a standard rate for larger ones, and separately from value added tax, which the calculator elsewhere on this site treats at 7.5 percent. When you budget for the full year, model the company income tax first, then add this levy, then VAT on your taxable supplies. A common error is forgetting the levy when a company tips from small to large mid-year, because the levy and the higher income tax rate can arrive together and the combined jump surprises the finance team.
Is the Development Levy deductible against company income tax?
Levies of this kind have historically not been an allowable deduction in computing taxable profit, and the reform is still settling the treatment, so do not assume you can net it off. Confirm the current position with the FIRS or your tax adviser before you reduce your taxable profit by the levy amount.
My turnover is under the cap but my factory is worth more than NGN 250 million. Am I exempt?
No. Both conditions have to be met for the small-company exemption, so failing the fixed-asset test makes you a large company even with modest turnover, and the 4 percent levy applies to your assessable profit.