Personal Income Tax Rates
Relevant Tax Laws:
- Personal Income Tax Act.
Chargeable Profit |
|
% |
Tax on Band |
Cummulative
Charge Profit |
Cummulative
Tax |
First |
30,000.00 |
5.00% |
1,500.00 |
30,000.00 |
1,500.00 |
Next |
30,000.00 |
10.00% |
3,000.00 |
60,000.00 |
4,500.00 |
Next |
50,000.00 |
15.00% |
7,500.00 |
110,000.00 |
12,000.00 |
Next |
50,000.00 |
20.00% |
10,000.00 |
160,000.00 |
22,000.00 |
Over |
160,000.00 |
25.00% |
|
|
|
Minimum Tax
The Employment Income on which minimum tax is due is still N30,000.00
Personal Income Tax Reliefs
Personal Relief’s (S.33)
Personal Allowance |
N5,000 plus 20% Earned income * |
Children Allowance |
N2,500 per child (Limited to 4 children) |
Dependent Relative Allowance |
N2,000(max for 2) |
Life Assurance Relief (LAR) |
Allowances are given in respect of premium paid by the taxpayer on policies taken out of the life taxpayer. |
Housing Allowance |
N150,000 per annum maximum |
Transport Allowance |
N20,000 per annum maximum |
Meal Allowance |
N5,000 per annum maximum |
Utility Allowance |
N10,000 per annum maximum |
Entertainment Allowance |
N6,000 per annum maximum |
Leave Allowance |
10% of annual basic salary |
Benefits-In-Kind (BIK)
BIK provided to the employee by the employer are deemed to be part of such employee’s gross emoluments and include:
- where the employee uses an asset, such as an official car, owned by the employer, the employee is treated as being in receipt of a taxable emolument of 5% of the original cost of the asset;
- where the asset is hired or rented for the employee by the employer, the employee is treated as being in receipt of the amount paid to the landlord or the hirer; and in the case of provision of accommodation for an employee, the annual rate or rate-able value of the accommodation is taken as part of the employee's emoluments.
Penalties for Non-Compliance
Failure by the employer to deduct tax from the employee attracts penalty of 10% and Interest at commercial rate (currently 21%) along with the principal amount payable.
Rendering of incorrect/false returns attracts, on conviction, a fine of N200 and double the amount of tax undercharged.
Withholding Taxes
Relevant Tax Laws:
- Companies And Allied Matters Act 1990
- Personal Income Tax Act
- Tax regulations introduced from time to time by minister of finance
Rates of Withholding tax for companies are as follows:
Dividend, Interest & Rent |
10.00% |
Royalties |
10.00% |
Commissions, Consultancy, Technical & Management |
10.00% |
Construction |
5.00% |
All types of contracts & agency arrangement ,other than sales
in the ordinary course of business |
5.00% |
Sales in the ordinary course of business |
5.00% |
Directors’ Fees |
10.00% |
|
|
Company Income Tax Rate
Relevant Tax Laws:
- Companies And Allied Matters Act 1990
1st Jan 1996 – Date
Education Tax |
• 30%
• 20% for Small business with annual turnover of less than N5million
2% |
Capital Allowances
The amount of capital allowance to be enjoyed in any year of assessment is restricted in Nigeria to a percentage of assessable profit. The following is a schedule for the sectors:
Tax Allowance |
Initial % |
Annual % |
Building Expenditure |
15 |
Nil |
Industrial Building Expenditure |
15 |
Nil |
Mining |
95 |
Nil |
Plant |
|
|
i. (Agric prod) |
95 |
Nil |
ii. Others |
50 |
20 |
Furniture fittings |
25 |
20 |
Motor Vehicles |
|
|
i. Public transpoprtation |
95 |
Nil |
ii. Others |
50 |
25 |
Housing Estate |
50 |
25 |
Ranching/Plantation |
30 |
50 |
R & D |
95 |
Nil |
Agro |
Additional |
|
Plants/Equipment |
Invest. |
Nil |
Leased |
Allowance 10% |
|
For more information visit www.firs.gov.ng
|
