Under current Nigerian law, taxation is enforced by the 3 tiers of Government, i.e. Federal, State, and Local Government with each having its sphere clearly spelt out in the Taxes and Levies (approved list for Collection) Decree, 1998. The following are some of the relevant tax and their regulations in the country.

(1) COMPANIES INCOME TAX (CIT).
Tax is payable for each year of assessment of the profits of any company at a rate of 30%. These include profits accruing in, derived form brought into or received from a trade, business or investment. Also companies paying dividends to its shareholders are first obliged to pay tax on its profits at the companies tax rate. Generally in Nigeria company dividends or other company distribution whether or not of a capital nature made by a Nigerian company is liable to tax at source of 10%, however dividends paid in the form of bonus share or scrip shares to individual share holders are not subject to tax, where also a company is a shareholder in another company then such dividends are excluded from the profits of the company for the purposes of computation of the tax.

Applicable tax law- Companies Income Tax Act. Persons subject to the Companies Income Tax:

All companies incorporated in Nigeria with the exception of companies engaged in petroleum operations.
All non-resident (foreign) companies that earn or derive income from Nigeria.
All organizations limited by guarantee (institutions of public character or charitable organizations) engaged in profit making activities other than the promotion of their primary objects.

Where to pay the Companies Income Tax:
Companies incorporated in Nigeria and organizations limited by guarantee pay Companies Income Tax through any of the designated banks. Once payment has been captured by the bank collecting system, an e-ticket is issued is issued the company, this e-ticket is proof of payment and when presented at the Integrated Tax Office with jurisdiction an e-receipt will be issued. Non-resident companies make payment through remittance of tax deducted at source to the designated banks.

How to pay the Companies Income Tax
Resident companies and organizations prepare and submit annual self-assessment tax returns as specified by FIRS accompanied by the evidence of the payment of the full amount or first installment of the tax due. Payment is made to designated banks
Non-resident companies are subject to Withholding Tax (WHT) deductions on the income they earn from Nigeria. This becomes their tax upon filing returns

(2) PETROLEUM PROFITS TAX (PPT)
Applicable tax law- Petroleum Profits Tax Act. Persons subject to the Petroleum Profits Tax:
Companies engaged in petroleum exploration and production operations in Nigeria (up-stream operations)
A person resident in Nigeria employed in the management of the petroleum operations carried on by a non-resident company
The liquidator, receiver, or agent of liquidator or receiver of any company carrying on petroleum operations in Nigeria.

Where to pay the Petroleum Profits Tax:
Companies carrying on petroleum operations in Nigeria make offshore payments to JP Morgan Chase Bank, the bank then advises the Central Bank of Nigeria to enable the bank credit FIRS accordingly.

How to pay the Petroleum Profits Tax
Every company engaged in petroleum operations prepares and submits annual returns as specified by the Petroleum Profits Tax Act within five months of the end of each assessment year. Payment is in two segments beginning with filing of estimated annual return not later than ending of February of each year. Payment for the tax due is then made in twelve monthly installments beginning from March of each year. Where the actual tax liability arising from the annual tax returns exceeds the cumulative estimated tax, a 13th month installment is payable and where the contrary is the case, a refund is due.

(3) VALUE ADDED TAX (VAT)
This was introduced by the VAT decree No. 2 of 1993, to replace the old sales tax. It is a consumption tax levied at each stage of the consumption chain, and is borne by the final consumer. It requires a taxable person upon registering with the Federal Board of Inland Revenue to charge and collect VAT at a flat rate of 5% of all invoiced amounts of taxable goods and services.
VAT paid by a business on purchases is known as input tax, which is recovered from VAT charged on company’s sales, known as output tax. If output exceeds input in any particular month the excess is remitted to the Federal Inland Revenue Service (FIRS) but where input exceeds output the taxpayer is entitled to a refund of the excess from FBIR though in practice this is not always possible.
A Taxpayer however has the option of recovering excess input from excess output of a subsequent period. It should be stated at this point that recoverable input is limited to VAT on goods imported directly for resale and goods that form the stock-in-trade used for the direct production of any new product on which the output VAT is charged. Learn more about Value Added Tax (VAT).

Applicable tax law- Value Added Tax Act. Persons subject to the Value Added Tax:
Any individual, corporation sole, group, body corporate or organization that consumes buys, procures or imports taxable goods or services is liable to pay the tax. How to pay the Value Added Tax

During direct sales or open market transactions, the buyer or consumer shall pay the tax to the seller together with the cost of the goods or services bought. The seller then nets off the VAT paid at the time of purchase of the stocks sold from the VAT collected on the stocks sold and credit the balance to FIRS.
Where the goods or services were supplied to a government Ministry, Department or Agency (MDA) or a company engaged in oil operations, the VAT payable by the MDA or oil company is deducted or withheld at source (at the point of payment). It is then credited directly to FIRS on behalf of the supplier
VAT payments are made on a monthly basis not later than 21days of every subsequent month. Tax payers prepare and submit monthly VAT returns accompanied by evidence of payment of the tax due at designated banks

Where to pay the Value Added Tax
VAT remittances may be made at any designated bank, an e-ticket is immediately issued as evidence of payment. This e-ticket may be presented at the ITO and an e-receipt will be issued the taxpayer.

(4) Personal Income Tax Act (PITA)
The legal basis for this tax is found in the provisions of the Personal Income Tax Decree [now Act]. 104 of 1993.
Every taxpayer in Nigeria is liable to pay tax on the aggregate amount of his income whether derived from within or outside Nigeria, the salaries, wages, fees, allowances, and other gains or benefits, given or granted to an employee are chargeable to tax. The Employers of labor are deemed to be agents of the tax authority for the purposes of remitting taxes deducted from salaries due to employees.

However residency of the Taxpayer determines the extent of a taxpayer’s liability in Nigeria. A person’s place of residence for this purpose is defined as a place available for his domestic use in Nigeria on a relevant day, excluding hotels and rest houses. A person is deemed resident in Nigeria if he resides in Nigeria for 183 days in any 12-month period, expatriates holding residence permits are liable to tax in Nigeria even if they reside in the country for less than 183days in any 12-month period. Once residence can be established, the relevant tax authority of the territory is the tax Authority in which the taxpayer has his place of residence or principal place of business.

The following are however exempted from tax: -

Medical or Dental expenses incurred by the employee;
Retirement gratuities and compensation loss of office;
The cost of passage to or from Nigeria incurred by the employee;
Interest on loans for developing an owner-occupied residential house;
Leave allowance, which is computed as 10% of annual basic salary subject to a maximum of N7, 500 per annum.

Persons subject to the Personal Income Tax
Individuals resident in the Federal Capital Territory, Abuja
Families, communities, trustees and estates resident in the Federal Capital Territory
Persons employed in the Nigerian Army, Nigerian Navy, Nigerian Air Force and Nigeria Police other than in civilian capacity.
A person resident outside Nigeria who derives income or profit from Nigeria
Officers of the Nigerian foreign service

Where to pay the Personal Income Tax

Persons employed in the Nigerian Army, Nigerian Navy, Nigerian Air Force and Nigeria Police, other than in civilian capacity, pay income tax at the designated banks
Individuals and enterprises in FCT pay at the designated banks, obtain an e-ticket and may request an e-receipt at the Individual and Enterprise Tax Office, Abuja.
Organizations, companies and MDAs pay at designated banks, obtain their e-tickets and may request for the e-receipts at the Large Tax Office (LTO) Abuja.

How to pay the Personal Income Tax

Persons on paid employment pay their personal income tax through the Pay As You Earn (PAYE) system. Under the system, employers deduct the prescribed tax from workers’ salaries and pay directly to the FIRS through the designated banks on behalf of the employees on a monthly basis

Any individual, corporation sole, group, body corporate or organization Self-employed individuals and enterprises prepare and submit annual self-assessment tax returns as specified by FIRS accompanied with evidence of payment of the full amount or first installment of the tax due. All payments are made at the designated banks.
(5) withholding Tax
(6) Capital Gain Tax
(7) Education Tax
( Stamp Duties
(9) NITDF
http://www.naijaaccountwiz..com.ng

Detailed explanation.
Thanks

designVATExcel:
Detailed explanation.
Thanks

you are welcome. please always visit our blog for more

Please can I see a Sample of PIT return

So which growing company will bare the harsh business climate in this country and pay a whole 30% as company tax?
We not only have a harsh business climate we also have unrealistic policies and conditions.

CodeTemplar:
So which growing company will bare the harsh business climate in this country and pay a whole 30% as company tax?
We not only have a harsh business climate we also have unrealistic policies and conditions.

30% of companies income tax is fair enough. Mind you, you are given certain reliefs to lesser your tax burden. You don't pay 30% of the entire profits made. Please consult a tax practitioner or an accountant for more info

asuustrike1:

30% of companies income tax is fair enough. Mind you, you are given certain reliefs to lesser your tax burden. You don't pay 30% of the entire profits made. Please consult a tax practitioner or an accountant for more info

better be true, becos 30% is a too much.

CodeTemplar:
better be true, becos 30% is a too much.

30% is small compare to other countries. For example
Equatorial Guinea, Malta and Zambia charges 35% while Cameron is 33% ( See https://taxfoundation.org/corporate-tax-rates-around-world-2018/)

Please I have a school business where the income isn't enough to pay teachers salaries yet the Ogun state government is requesting I pay 45k as my tax and later pay PAYEE (1% Of my teachers salary ), I don't have a problem with the 1% but how can I pay income tax when am not making profit... 08032962213