Your Guide to Tax& Compliance
Businesses in Nigeria are subject to a mix of federal, state, and local taxes, alongside mandatory employer obligations. Core responsibilities include corporate taxes, VAT, PAYE, withholding tax, and statutory employee contributions. Compliance requires timely filing, accurate deductions, and strict adherence to FIRS and State Internal Revenue Service (SIRS) rules.
1. Federal Taxes (FIRS-administered)
• Company Income Tax (CIT): Annual tax on profits.
• Value Added Tax (VAT): Charged on goods and services; remitted monthly.
• Withholding Tax (WHT): Deducted at source on certain payments; remitted monthly, credited to recipients.
• Tertiary Education Tax (TET): 3% of assessable profits for education funding.
• Capital Gains Tax (CGT): Charged on asset disposals.
• Stamp Duties: Levied on contracts and financial instruments.
• Petroleum Taxes: Sector-specific (Petroleum Profits Tax, Hydrocarbon Tax).
2. Employer & Payroll Obligations
• PAYE (Personal Income Tax): Deducted from employees’ salaries, remitted to state tax authorities by the 10th of the following month.
• Pension Contributions: Mandatory employer + employee contributions under the Pension Reform Act.
• National Housing Fund (NHF): 2.5% employee contribution.
• Employee Compensation (NSITF): Employer-funded, covers workplace injury risks.
3. State & Local Levies
• State Taxes: Personal income tax (PAYE), development levies, state stamp duties.
• Local Government Levies: Tenement rates, market/shop permits, advertising fees.
Note: Confirm legitimacy under the Taxes & Levies (Approved List) Act to avoid illegal multiple charges.
4. Customs & Import Duties
• Levied on imported goods based on HS codes (5%–35%). Administered by the Nigeria Customs Service.
5. Filing & Compliance
• PAYE: By 10th of the following month.
• VAT & WHT: Monthly remittances.
• CIT & TET: Annual returns based on company accounting year.
• Penalties: Late or non-compliance attracts interest, fines, and loss of tax credits.