Income tax in Nigeria is levied at a progressive rates capped at 24%. Here are the applicable rates for personal income tax in Nigeria : Annual income (NGN): First 300,000: personal income tax rate of 7%
What tax system does Nigeria operate?
Nigeria operates a decentralized tax system where each level of government is independently responsible for the administration of taxes within its jurisdiction. Nigeria generate revenue to fund government expenditure through a pool of taxes from each tier of government.
What is Nigeria tax policy?
PIT is calculated at graduated rates ranging between 7% and 24% of individual’s taxable income, with effective tax rate falling below 20% for every category of individual liable to tax in Nigeria. Nigerian residents are taxed on their worldwide income, while non-residents are taxed only on their Nigerian-source income.
Do foreigners pay taxes in Nigeria?
A foreigner holding a Nigerian residence permit (CERPAC) is also deemed to be a tax resident. Individual residents in Nigeria are taxable on their worldwide income, whereas a non-resident is only taxable on the income earned from business activities performed in Nigeria.
What is Nigeria tax rate?
The Personal Income Tax Rate in Nigeria stands at 24 percent. source: Federal Inland Revenue Service, Nigeria.
How much tax is deducted from salary in Nigeria?
It is called PAYE tax. This tax rate progresses from 7 percent to 24 percent of taxable income.
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Tax rates.
| Annual taxable income (NGN) | Rate | Tax payable per annum (NGN) |
|---|---|---|
| First NGN300,00 | 7% | 21,000 |
| Next NGN300,000 | 11% | 33,000 |
| Next NGN500,000 | 15% | 75,000 |
| Next NGN500,000 | 19% | 95,000 |
What are the objectives of taxation in Nigeria?
The primary purpose of taxation is to raise revenue to meet huge public expenditure. Most governmental activities must be financed by taxation.
What are the problems of tax administration in Nigeria?
Therefore, the problems of tax administration in Nigeria are as stated below: Corruption, lack of adequate and qualified tax personnel, poor government supervision, lack of revenue court, lack of data management, multiplicity of taxes, non-remittance of PAYE deductions, and tax evasion and avoidance.
What is minimum tax in Nigeria?
Minimum tax payable is calculated as 0.5% of gross turnover less franked investment income. For non-life insurance companies, minimum tax is calculated as 0.5% of gross premium. For life insurance companies, minimum tax is calculated as 0.5% of gross income.
Do we pay tax in Nigeria?
Although taxes are considered as a legal requirement, paying taxes is also considered a civic duty. … In 2015, the federal government of Nigeria collected over 3.7 trillion Naira in taxes. This could come from several sources such as Personal Income Tax, Payroll Tax, Corporate Tax, Tariffs and many more.
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.
Does an enterprise pay tax in Nigeria?
Companies Income Tax (CIT): Under the Companies Income Tax Act of Nigeria, a resident or non-resident company incorporated in Nigeria must pay Companies Income tax. … Education Tax (EDT): Here, a tax of 2% of assessable profits is imposed on all companies incorporated in Nigeria.
How much is VAT in Nigeria?
VAT rates in Nigeria
The main VAT rate in Nigeria is 7.5% (raised from 5% on 1st Feburary 2020). Only a limited number of supplies are nil-rated, meaning any VAT suffered may be recredited to the tax payer.
Do pensioners pay tax in Nigeria?
The Pension Reform Act 2014 (PRA 2014) which repeals the Pension Reform Act 2004, governs and regulates the administration of the contributory pension scheme in Nigeria. Taxable income is assessed to tax at graduated rates ranging from 7 percent to 24 percent, depending on the income band being assessed.