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.

What tax do enterprises pay?

Limited companies pay Corporation Tax on their profits (minus any reliefs they can claim). Currently, the rate is 19% and plans to cut this to 17% have been put on hold. As an employee, you pay personal tax and NICs through the company’s PAYE (i.e. pay as you earn) scheme.

What taxes do businesses pay in Nigeria?


The CIT is currently charged at the rate of 30% for companies having more than N100 Million Naira turnover. It is also charged at the rate of 20% for companies with a turnover between N25 Million and N100 Million.

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Do business names pay tax in Nigeria?

DO BUSINESS NAMES PAY TAX IN NIGERIA? Business name owners like companies are required to pay taxes but because they are not an incorporated entity thus business name owners do not pay companies income tax.

How do business owners pay tax in Nigeria?


All businesses must pay tax on their income. This means that a business must pay tax on the profit of the business. How that tax is paid depends on the form of the business. Small businesses (sole proprietors and single-member LLCs) owners pay taxes on their personal income tax returns.

How much can you earn before paying tax?

The standard Personal Allowance is £12,570, which is the amount of income you do not have to pay tax on. Your Personal Allowance may be bigger if you claim Marriage Allowance or Blind Person’s Allowance. It’s smaller if your income is over £100,000.

How do business owners pay less taxes?

If you need ways to reduce your taxable income this year, consider some of the following methods below.

  1. Employ a Family Member.
  2. Start a Retirement Plan.
  3. Save Money for Healthcare Needs.
  4. Change Your Business Structure.
  5. Deduct Travel Expenses.
  6. The Bottom Line.

Do small businesses pay VAT in Nigeria?

Although the FG increased VAT – a consumption tax on the “value-added” to the product throughout its production process – to 7.5 percent from 5 percent, companies with turnover of N25 million or less were exempted from filing VAT returns and Company Income Tax (CIT). Others above this threshold aren’t exempted.

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What is minimum tax in Nigeria?

Minimum tax payable is calculated as 0.5% of gross turnover less franked investment income. For non-life insurance companies, minimum tax is calculated as 0.5% of gross premium. For life insurance companies, minimum tax is calculated as 0.5% of gross income.

Do small businesses 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. For CIT, tax payable for each year of assessment on profits of a company accruing in, derived from or brought into Nigeria stands at 30%.

How do I avoid paying tax when self employed?

The only guaranteed way to lower your self-employment tax is to increase your business-related expenses. This will reduce your net income and correspondingly reduce your self-employment tax. Regular deductions such as the standard deduction or itemized deductions won’t reduce your self-employment tax.

Do freelancers pay tax in Nigeria?

A pertinent reason for this is the low rate of tax collection in the informal market, which is largely made up of sole entrepreneurs, freelancers and those with alternative sources of income. … Nigeria does not operate a flat tax rate, rather taxes are progressive.

How much income can a small business make without paying taxes?

As a sole proprietor or independent contractor, anything you earn about and beyond $400 is considered taxable small business income, according to Fresh Books.

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.

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Who is a taxable person in Nigeria?

A person is deemed resident in Nigeria if he or she resides in Nigeria for 183 days in any 12-month period; however, expatriates holding residence permits are also liable to tax in Nigeria even if they reside in the country for less than 183 days in any 12-month period.

What tax system does Nigeria use?

Tax administration in Nigeria is vested in the three tiers of government.

Nigeria: Administration Of Taxes In Nigeria.

Value Added Tax (VAT) 5% on the supply of goods and services Value Added Tax Act
Education Tax 2% of assessable profits of a company Education Tax Act
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