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 the meaning of tax administration?
The term “tax administration” means: a. the administration, management, conduct, direction, and supervision of the execution and application of the internal revenue laws or related statutes (or equivalent laws and statutes of a State) and tax conventions to which the United States is a party; and.
What is taxation in Nigeria?
Filing Tax Returns – Federal Internal Revenue Service (FIRS)
Filing of tax returns for various taxes with the Tax Authority is a legal obligation which must be fulfilled by every taxpayer and contain information on relevant tax affairs for a given period for the purpose of complying with the tax laws.
What is Nigerian tax law?
Tax legislation is the act or process of enacting tax laws and the body of laws that provide for the levying of taxes and tax administration. The following are the existing tax legislation in Nigeria, as at 2016: – Associated Gas Re-Injection Act. – Capital Gains Tax Act. – Companies Income Tax Act.
How do taxes work in Nigeria?
Employees simply pay their income tax through the Pay As You Earn (PAYE) system, whereby employers deduct the due tax at source from the salaries and transfer it directly to the FIRS on a monthly basis, while independent workers and beneficiaries of additional income are required to file their own tax returns.
What are the 4 types of tax?
Learn about 12 specific taxes, four within each main category—earn: individual income taxes, corporate income taxes, payroll taxes, and capital gains taxes; buy: sales taxes, gross receipts taxes, value-added taxes, and excise taxes; and own: property taxes, tangible personal property taxes, estate and inheritance …
What are 3 types of taxes?
Tax systems in the U.S. fall into three main categories: Regressive, proportional, and progressive.
How much is PAYE tax in Nigeria?
It is called PAYE tax. This tax rate progresses from 7 percent to 24 percent of taxable income.
|Annual taxable income (NGN)||Rate||Tax payable per annum (NGN)|
How can I pay less tax in Nigeria?
How to avoid paying excessive taxes in Nigeria
- Donate Money to Organizations listed in schedule 5 of CITA. …
- When you sell an asset, reinvest it into the same class of asset. …
- Deduct Vat that you pay on your purchases from vat that you receive on your supplies. …
- Register an NGO (Non Governmental Organisation) or a Trust.
What are the types of taxes in Nigeria?
Types Of Taxes In Nigeria
- Companies Income Taxes (CIT) CIT is one of the major types of taxes collected by FIRS. …
- Value Added Taxes (VAT) …
- Withholding Taxes (WHT) …
- Petroleum Profits Taxes (PPT) …
- Personal Income Taxes (PIT) …
- Stamp Duties (SD) …
- Capital Gains Taxes (CGT) …
- National Information Technology Development Levy (NITDL)
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.
Who is required to pay tax?
Who are the Tax Payers? Any Indian citizen aged below 60 years is liable to pay income tax, if their income exceeds Rs 2.5 lakhs. If the individual is above 60 years of age and earns more than Rs 2.5 lakhs, he/she will have to pay taxes to the Government of India.
What are the main principles of taxation?
In discussing the general principles of taxation, one must not lose sight of the fact that taxes must be administered by an accountable authority. There are four general requirements for the efficient administration of tax laws: clarity, stability (or continuity), cost-effectiveness, and convenience.
Is Nigeria a tax haven?
New research shows that SABMiller, for example, has three subsidiary companies registered in Nigeria, compared with 108 in jurisdictions classed as tax havens. … Research suggests that poor and middle-class Nigerians pay proportionally more in taxes than the rich and big corporations.
What is Nigeria basic salary?
Minimum Wages in Nigeria averaged 27000 NGN/Month from 2018 until 2021, reaching an all time high of 30000 NGN/Month in 2019 and a record low of 18000 NGN/Month in 2018.
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.