Quick Answer: Is minimum wage taxed in Nigeria?

A provision of the tax law exempts individuals earning the national monthly minimum wage of ₦30,000 or less from the payment of individual income tax. The guidance clarifies that any amount above that minimum wage threshold will be subject to individual income tax.

What is the minimum taxable income in Nigeria?

The Finance Act 2020 defines a low-income earner as a person who earns the National Minimum Wage or less. At the moment, the threshold in Nigeria stands NGN30,000 per month or NGN360,000 per annum.

Is minimum wage earner exempt from tax?

“Provided, That minimum wage earners as defined in Section 22(HH) of this Code shall be exempt from the payment of income tax on their taxable income: Prouided, further, That the holiday pay, overtime pay, night shift differential pay and hazard pay received by such minimum wage earners shall likewise be exempt from …

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Is 13th month salary taxable in Nigeria?

13th-month pay is usually exempt from any taxes. However, any payments over the one-twelfth denomination of the employee’s basic salary are taxable.

What is the rate of minimum tax under the new Finance Act 2020?

Minimum tax rate shall be 0.5% of gross turnover, less franked investment income. This rate shall be reduced to 0.25% for tax returns filed in respect of any year of assessment that is due on any date between 1st January 2020 and 31st December 2021.

How can I pay less tax in Nigeria?

How to avoid paying excessive taxes in Nigeria

  1. Donate Money to Organizations listed in schedule 5 of CITA. …
  2. When you sell an asset, reinvest it into the same class of asset. …
  3. Deduct Vat that you pay on your purchases from vat that you receive on your supplies. …
  4. Register an NGO (Non Governmental Organisation) or a Trust. …
  5. Apply for Capital Allowance Certificate.


Do freelancers pay tax in Nigeria?

A pertinent reason for this is the low rate of tax collection in the informal market, which is largely made up of sole entrepreneurs, freelancers and those with alternative sources of income. … Nigeria does not operate a flat tax rate, rather taxes are progressive.

What is the minimum salary to pay income tax?

As per interim budget 2019, Individual taxpayers having taxable annual income up to Rs. 5 lakh will get full tax rebate u/s 87A and therefore will not be required to pay any income tax.

What is the minimum salary to pay income tax in Philippines?

Updated March 2018 Page 2 2 Starting January 1, 2018, compensation income earners, self-employed and professional taxpayers (SEPs) whose annual taxable incomes are P250,000 or less are exempt from the personal income tax (PIT). The 13th month pay and other benefits amounting to P90,000 are likewise tax-exempt.

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How much salary is exempt from tax?

Rebate of up to Rs 12,500 is available under section 87A under both tax regimes. Thus, no income tax is payable for total taxable income up to Rs 5 lakh in both regimes. Rebate under section 87A is not available for NRIs and Hindu Undivided Families (HUF)

How is 13th month salary calculated?

In some organization, the 13th month is computed as full month salary. It could be viewed as paying an extra one month salary in a calendar year. Some Nigerian companies simply divide the total negotiated salary with an employee by 13 and pay out the 13th part as the 13th month.

What is the current tax rate in Nigeria?

The Personal Income Tax Rate in Nigeria stands at 24 percent. source: Federal Inland Revenue Service, Nigeria.

What is the meaning of 13th month salary?

A 13th month salary is a payment that an employer pays to employees according to different terms of law or contract of employment. The payment, which usually takes place around December, is traditionally called Christmas bonus and the salary may be equivalent to one full month salary.

Has the Finance Bill 2020 been passed?

CONTACTS. On 23 March 2020, the Lok Sabha, the lower house of India’s bi-cameral legislature, passed the Finance Bill, 2020 (the amended Bill) with certain amendments. Further, the amended Bill was passed in Rajya Sabha, the upper house, and it received presidential assent on 27 March 2020.

What is the meaning of minimum tax?

n. Abbr. AMT. A federal tax on taxable income that applies if deductions and adjustments to income reduce the standard income tax that one owes to an amount less than a specified minimum.

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What is the difference between Finance Act and Finance Bill?

As per Article 110 of the Constitution of India, the Finance Bill is a Money Bill. The Finance Bill is a part of the Union Budget, stipulating all the legal amendments required for the changes in taxation proposed by the Finance Minister. … Post the Lok Sabha’s approval, the Finance Bill becomes Finance Act.

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