Thursday, 7 February 2019

New National Tax Policy In Nigeria: All You Need To Know


A tax is a mandatory levy imposed upon a taxpayer by the
government in other to raise funds for government expenditure and also for revenue generation. 

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Evasion of tax is punishable by law. This post contains everything you need to know about tax policy in Nigeria and also the new national tax policy in Nigeria.  

Tax Policy In Nigeria

The government of Nigeria impose tax directly or indirectly,listed below is the different types of tax imposed in Nigeria.

Tax On Companies

Petroleum Profits Tax

This is imposed by the government of Nigeria on the profits of all corporate entities that are registered in Nigeria or who get their income from oil and gas operations in Nigeria.

Companies Income Tax

This tax is imposed by the government of Nigeria on the profits of all corporate entities/companies who are registered in Nigeria or gain income from Nigeria.

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Education Tax

This form of tax is imposed by the federal government of Nigeria on all corporate entities registered in Nigeria.

Technology Levy

The government of Nigeria impose tax on specific tech companies such as telecommunication companies, internet service providers, pension managers, banks, insurance companies, financial institutions Etc


Tax On Individuals


Personal Income Tax

This form of government tax is imposed on the income of all Nigeria citizens or foreign residents who earn their income in Nigeria.

Development Levy

This is a government tax imposed on every taxable person typically within each state in Nigeria.

Tax On Transactions

Value Added Tax

This tax is imposed on the net sales value of qualifying goods and services within Nigeria.

Capital Gains Tax

This is a tax imposed on capital gains gotten from sale or disposal of chargeable assets.

Stamp Duty

This is a tax imposed on instruments executed by individuals and corporate entities in Nigeria.

Excise Duty

This form of tax is imposed on the manufacture of specified goods within the Government territory collected by the Nigeria Customs Service.

Import Duty

This is tax imposed on the importation of goods imported into Nigeria,this tax is collected by the Nigerian Customs Service.
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Export Duty

This form of tax imposed on goods exported outside Nigeria,this tax is collected by the Nigeria Customs Service.

Tax on Assets

This form of government tax include property tax and other taxes imposed by the government on land or landed property owned by companies or individuals.

This are the types of taxes imposed by the federal government of Nigeria,listed below is the new national tax policy that was approved by the Federal Executive Council. 

New National Tax Policy (NTP)

When the new national tax policy is fully implemented, the Policy should address key challenges confronting the Nigeria tax system such as:

  • low tax to GDP ratio.
  • fragmented database of taxpayers and weak structure for exchange of information.
  • multiplicity of taxes and revenue agencies.
  • poor accountability for tax revenue.
  • use of aggressive and unorthodox methods for tax collection.
  • failure by tax authorities to honor refund obligations to taxpayers.
  • the non-regular review of tax legislation, which has led to obsolete laws, that do not reflect.
  • current economic realities.
See AlsoCompany Income Tax In Nigeria

Some of the key recommendations include to address the challenges include:

  • ensuring that there is only one revenue agency per level of government.
  • establishment of a tax court as an independent body to adjudicate in tax matters.
  • lower tax rate and VAT compliance threshold for SMEs.
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  • establishment of an Office of Tax Simplification for continuous improvement to tax legislation and administration and develop Key Performance Indices for Nigeria to attain a top 50 position on the global index of ease of paying taxes by 2020 and consistently improve on the ranking.
  • administrative framework for amnesty and whistle blowing as part of the strategies for curbing evasion and widening the tax net.
  • INEC to mandate political parties to articulate, prepare, provide and make public their tax agenda before and during election campaigns.
The approved Policy also contains and appendix of changes required to existing laws, repeals and new enactments. 

Reference: 
Federal Executive Council



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