December 05, (THEWILL) — Nigeria’s decision to maintain a 30 percent Company Income Tax (CIT) rate significantly higher than the global average of about 23.5 percent is raising fresh concerns about the country’s ability to attract and retain foreign direct investment (FDI).
The high nominal rate is compounded by additional levies, including a 4 percent development tax on assessable profits, meaning that large, profitable firms may effectively pay well above 30 percent in total corporate levies.
Experts argue that this stacked tax burden reduces Nigeria’s appeal to multinational companies deciding where to anchor regional headquarters, especially when competing countries offer lower corporate tax regimes. Some peers in Africa, including Ghana, South Africa, and Egypt, apply lower statutory rates, making them more attractive for long-term foreign capital.
Despite the heavy tax burden, revenue from CIT remains a substantial source of government income. In the first half of 2025 alone, CIT collections hit N4.76 trillion, reflecting a 37.9 percent year-on-year increase. If this pace continues, CIT revenue could reach roughly N9.5 trillion for the full year.
But industry watchers warn the trade-off may be too costly. A recent plunge in net FDI down 70 percent in early 2025 is seen as a sign that foreign investors are already responding to Nigeria’s uphill tax environment.
Although there are plans to lower the statutory rate to 25 percent, the revival of investor confidence will depend not just on headline rates, but also on the broader tax regime, including multiple levies, predictability of fiscal policy, and clarity of incentives.
Ogochukwu Onwaeze
