Taxation in Nigeria
TAXATION AND FISCAL REGULATIONS IN NIGERIA
INTRODUCTION
The Nigerian Tax System has undergone significant changes in recent times. The Tax Laws are being reviewed with the aim of repelling obsolete provisions and simplifying the main ones. Under current Nigerian law, taxation is enforced by the 3 tiers of Government, i.e. Federal, State, and Local Government with each having its sphere clearly spelt out in the Taxes and Levies (approved list for Collection) Decree, 1998. Of importance at this juncture however are tax regulations pertaining to investors both foreign and local.
The importance of tax regulations cannot be over-emphasized, as most transactions with any Ministry, department, or government agency cannot be concluded without evidence of tax clearance. i.e. a Tax Clearance Certificate certifying that all taxes due for the three immediately preceding years of assessment have been settled in full.
LIST OF APPROVED TAXES AND LEVIES FOR THE THREE TIERS OF GOVERNMENT
A list of taxes and levies for collection by the three tiers of government has been approved by government and published by the Joint Tax Board (J.T.B.) as follows:
(A) Taxes collectible by the Federal Government 1) Companies income tax; 2) Withholding tax on companies; 3) Petroleum Profit Tax; 4) Value-added tax (VAT); 5) Education tax; 6) Capital gains tax - Abuja residents and corporate bodies; 7) Stamp duties involving a corporate entity; 8) Personal income tax in respect of: - Armed forces personnel; - Police personnel; - Residents of Abuja FCT; - External Affairs officers; and - Non-residents.
(B) Taxes/Levies Collectible by State Governments 1) Personal income tax: - Pay-As-You-Earn (PAYE); - Direct (self and government) assessment; - Withholding tax (individuals only); 2) Capital gains tax; 3) Stamp duties
INTRODUCTION
The Nigerian Tax System has undergone significant changes in recent times. The Tax Laws are being reviewed with the aim of repelling obsolete provisions and simplifying the main ones. Under current Nigerian law, taxation is enforced by the 3 tiers of Government, i.e. Federal, State, and Local Government with each having its sphere clearly spelt out in the Taxes and Levies (approved list for Collection) Decree, 1998. Of importance at this juncture however are tax regulations pertaining to investors both foreign and local.
The importance of tax regulations cannot be over-emphasized, as most transactions with any Ministry, department, or government agency cannot be concluded without evidence of tax clearance. i.e. a Tax Clearance Certificate certifying that all taxes due for the three immediately preceding years of assessment have been settled in full.
LIST OF APPROVED TAXES AND LEVIES FOR THE THREE TIERS OF GOVERNMENT
A list of taxes and levies for collection by the three tiers of government has been approved by government and published by the Joint Tax Board (J.T.B.) as follows:
(A) Taxes collectible by the Federal Government 1) Companies income tax; 2) Withholding tax on companies; 3) Petroleum Profit Tax; 4) Value-added tax (VAT); 5) Education tax; 6) Capital gains tax - Abuja residents and corporate bodies; 7) Stamp duties involving a corporate entity; 8) Personal income tax in respect of: - Armed forces personnel; - Police personnel; - Residents of Abuja FCT; - External Affairs officers; and - Non-residents.
(B) Taxes/Levies Collectible by State Governments 1) Personal income tax: - Pay-As-You-Earn (PAYE); - Direct (self and government) assessment; - Withholding tax (individuals only); 2) Capital gains tax; 3) Stamp duties