Investor Presentaiton
The Country and its
institutions
Business Organisation Labour and Social
and Regulation
Security Regulations
The Nigerian Financial Tax System
Services Industry
Foreign Exchange
Transactions
Investment in Nigeria
Accounting and
Auditing Requirements
Importation of Goods Exportation of Goods
COVID-19 Economic
and Fiscal Measures
There are three levels of taxation in Nigeria based on the three-tiers of government in the
country, viz:
(i) Federal Government
(ii) State Government
(iii) Local Government
The Federal Government has jurisdiction over Companies Income Tax, Tertiary Education
Tax, Personal Income Tax, Capital Gains Tax (on capital gains made by companies), Value
Added Tax, Petroleum Profits Tax, Custom Duties (comprising import, export and excise
duties) and Stamp Duties payable on transactions involving bodies corporate. In respect
of Personal Income Tax, the authority of the Federal Government is restricted to the
following:
•
•
persons employed in the Nigeria Army, Navy, Air Force, Police other than in a civilian
capacity;
officers of the Nigerian Foreign Service;
any other non-resident who derives income or profit from Nigeria.
The States and the Federal Capital Territory Internal Revenue Service, respectively, have
responsibilities for the assessment and collection of Personal Income Tax payable on
the income of individuals resident within their States and Capital Territory, respectively.
They also collect Capital Gains Tax on capital gains derived by individuals from disposal of
assets located in their jurisdictions, and Stamp Duties on instruments executed between
individuals in their jurisdictions.
The Local Governments are responsible for miscellaneous taxes, levies and rates, such as
tenement rates.
T
X
A
In 1998, the Federal Government enacted the Taxes and Levies (Approved List for
Collection) Act, which defines the taxes and levies collectible by the three tiers
of Government, to avoid multiple taxation and conflict among the three levels of
Government. However, in practice, the Act is not always respected by State and Local
Governments thereby making multiple taxation a common practice.
The applicable taxes in Nigeria can be classified as follows:
•
Direct taxes
companies' income tax
- tertiary education tax
- personal income tax
- capital gains tax
- petroleum profits tax
miscellaneous taxes
Indirect taxes
value added tax
custom duties on imports and exports
excise duties
stamp duties
Finance Act, 2020 ("the Act"), which was signed into law on 31 December 2020 by His
Excellency, President Muhammadu Buhari, GCFR, introduced amendments to the Capital
Gains Tax Act, Companies Income Tax Act, Industrial Development (Income Tax Relief) Act,
Personal Income Tax Act, Tertiary Education Trust Fund (Establishment, etc.) Act, Customs,
Excise Tariff, etc. (Consolidation) Act, Value Added Tax Act, Stamp Duties Act, Federal Inland
Revenue Service (Establishment) Act, Nigeria Export Processing Zones Authority Act, Oil
and Gas Export Free Zone Act, Companies and Allied Matter Act, Fiscal Responsibility Act
and the Public Procurement Act.
Following the implementation of Finance Act, 2019, Finance Act, 2020 signifies a second
consecutive wave of amendments aimed to align the fiscal laws of Nigeria with global
best practices. The passage of the Act reinforces the Federal Government's commitment
to making incremental changes to Nigeria's fiscal framework with a view to achieving the
country's economic growth and development objectives.
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Investment in Nigeria Guide - 8th Edition
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