Want to learn more about Taxes in Nigeria? If you are reading this post, then you are one of the growing numbers of Nigerian business persons and entrepreneurs who are interested in knowing what their tax obligations are, and making sure they are operating their business while paying the right taxes.
- Capital Gains Tax
- Companies Income Tax
- Education Tax
- Personal Income Tax
- Stamp Duties
- Value Added Tax
- Withholding Tax
In Nigeria, all persons in employment, individuals in business, non-residents who derive income from Nigeria as well as companies that operate in Nigeria are liable to pay tax.
Some taxes are payable to the Federal Government (and administered by Federal Inland Revenue Service), some are payable to the State Governments and some to Local Governments.
Taxes in Nigeria
The different taxes areas listed below
Capital Gains Tax:
Capital Gains Tax Act. Chapter 42. LFN 1990
A 10% tax imposed on Capital Gains arising from a sale, exchange or other disposition of properties known as chargeable assets.
Companies Income Tax:
Companies Income Tax Act. Chapter 60. LFN 1990
A tax chargeable on all companies (other than Companies engaged in petroleum operations as defined under the PPTA) registered in Nigeria.
Education Tax Act. No 7 of 1993
A tax that is chargeable on all companies registered in Nigeria at 2% of chargeable profits as a contribution to the Education Tax Fund.
Personal Income Tax:
Personal Income Tax Act. No 104 of 1993
A tax that is payable by all individuals and registered businesses and partnerships except those registered under Part A of Companies and Allied Matters Act 1990.
Stamp Duties Act. Chapter 411. LFN 1990
Stamp Duty is Chargeable according to a scale fixed by the Joint Tax Board.
Value Added Tax:
Value Added Tax Act. No 102 of 1993
A tax payable by the consumer at 5% of the net value added based on eligible transactions once consumed.
All registered businesses are expected to register and have a VAT registration certificate, and boldly display their VAT registration number on all invoices.
This is not really a tax.
It is an advance payment of tax (at 10%) to which individuals and organizations are entitled to demand a withholding tax credit note.