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Overview of Business Taxes in Nigeria
These taxes are designed to generate revenue for the government and contribute to the country's economic development.Tax revenues can be used to provide basic infrastructure, such as roads and transportation, which facilitates trade and economic activities.
The main types of business taxes in Nigeria include:
Author: Adeola Oyinlade & Co.
- Company Income Tax (CIT):
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- 0% on profit for amount less than NGN25 million.
- 20% of assessable profit on amounts between NGN25 million and NGN100 million.
- 30% of assessable profits on amount above NGN100 million.
- Capital Gains Tax (CGT):
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- Property: Real estate, including land and buildings
- Stocks and Shares: Securities traded on the Nigerian Stock Exchange
- Debts: Debts owed to the taxpayer
- Options: Options to buy or sell assets
- Incorporeal Property: Intellectual property, patents, and copyrights
- Currency: Any currency other than Nigerian currency
- Assets Outside Nigeria: Any assets, whether owned by individuals or businesses, that are situated outside of Nigeria
- Value Added Tax (VAT):
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- Goods: Basic food items, medical and pharmaceutical products, educational books and materials, baby products, fertilizers, locally-produced agricultural chemicals, veterinary medicine, and petroleum products
- Service: Medical services, services rendered by Unit Micro-Finance Banks and Mortgage Institutions, plays and performances conducted by educational institutions as part of learning, exported services, commercial airline transportation tickets, lease or rental of a residential accommodation, shared passenger road-transport service, and tuition of a nursery, primary, secondary, and tertiary education.
- Withholding Tax (WHT):
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- Rent (including hire of equipment): 10% for both companies and individuals
- Dividends: 10% for both companies and individuals
- Interest: 10% for both companies and individuals
- Royalties: 10% for companies and 5% for individuals
- Commission, consultancy, technical, and professional services: 10% for companies and 5% for individuals
- Management services: 10% for both companies and individuals
- Construction (roads, buildings, and bridges): 2.5% for both companies and individuals
- Contracts other than sales in the ordinary course of business: 5% for both businesses and individuals.
- Petroleum Profit Tax (PPT):
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- Production sharing contracts (PSCs): 50%
- Non-PSC operations (JVs): 65.75% in the first five years and 85% after five years.
- Upstream gas profits: 30%
- Converted/renewed onshore and shallow offshore PML: 30%
- Onshore and shallow onshore PPL, and marginal fields: 15%.
- Deep offshore: not provided.
- Business Premises Tax (BPT):
- Stamp Duty Tax
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- Fixed Rate: 15 Kobo for agreements not otherwise stated in the SDA.
- Ad valorem rate is 1% for contracts with no stated rates.
- The electronic money transfer levy (EMTL) is 0.5% for bank deposits and transfers.
- Industrial Training Fund (ITF):
- Information Technology (IT) Tax:
- Customs Duties:
Author: Adeola Oyinlade & Co.