Thursday, 15 March 2018

Tax Revenue In Nigeria: 10 Quick Facts


A Tax is a mandatory fee paid by the citizen of a country to the government,listed below are some quick facts that you should know about tax revenue system in Nigeria. 

Tax Revenue In Nigeria: 10 Quick Facts
  • 1. According to the Nigerian Law,taxes are to be collected by the three  tiers of Government which is the Federal,State and Local Government.
  • 2. Tax revenue constitutes a major component of national funding and revenue generation for the government.
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  • 3. In Nigeria,tax is levied on both individuals and the companies/corporate bodies by the Government.

  • 4. Currently in Nigeria there are about 4 types of tax levied on individuals and companies namely: the Value added tax,Capital Gains Tax,Education Tax,Personal Income Tax and Companies Income Tax.
  • 5. The Value added tax is taxed on taxable individuals on registration with the Federal Board of Inland Revenue. The board is expected to collect a flat rate of 5% of all invoiced amounts of taxable goods and services.

  • See Also: New National Tax Policy In Nigeria

  • 6. The Capital Gains Tax is paid yearly and is in respect to all gains made by a taxpayer from the sale or lease of a chargeable interest. This is subject  to a capital gains tax of 10%.
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  • 7. Education tax is imposed on all companies that are incorporated in Nigeria,this tax is considered to be a social obligation placed on all companies operating in Nigeria to ensuring that they contribute their own quota in developing educational facilities in Nigeria.The tax to be paid is of 2% of profits made.
  • 8. The Personal Income Tax is tax paid on the amount of a persons income whether derived from within or outside Nigeria.These include salaries, wages, fees, allowances etc given to an employee of labor. However in this case,the employers of labor are responsible for the remittance of taxes deducted from salaries and should submit the tax money to the appropriate tax authorities.
  • 9. The Companies Income Tax is the tax payable by companies in Nigeria,The Companies Income Tax has a fixed rate of 30%.
  • 10. Tax evasion is a serious offense that may attract jail sentence,the government has also put in place several bodies in other to ensure tax compliance,however most Nigerians still do not pay tax or comply with the tax policies.



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