A vibrant industry known as tax planning or tax avoidance has developed in the field of taxation as a consequence of the cardinalrule of interpretation of taxing statutes. A person who is in charge of his own business, for instance should know what he may be required to pay as TAX when earns profit and the tax allowances he may derive in respect of his capital expenditure. He should be able to take advantage of the opportunities afforded him by law to offset his losses. Many tax incentives which the law offers to businessmen are to be claimed specifically.
So, a person who wishes to take advantage of these must, therefore be familiar with the relevant laws. In the field of revenue law, any arrangement whereby a private person or a businessman lawfully eliminates or reduces his tax burden is referred to a tax planning or tax avoidance.
Tax Avoidance is the systematic way of organising one's affairs with a view to minimising one's tax obligation as much as possible.
Without much ado,let us look at various forms,loopholes and provisions one can use to avoid paying tax.
1) REGISTER AS A NON GOVERNMENTAL ORGANISATION OR AS A TRUST
Companies registered as Limited by Guarantee are exempted from paying tax in Nigeria. For example; Churches, Mosques e.t.c. Organisations that are into charitable causes though do not pay taxes they are not expected to pay divdends to their owners. Note that transations made by them that results in a profit can equally be taxed.

2) WHT receipts

Withholding tax is one of the most popular form of taxation in nigeria. It is paid on contract on supplies, services,director's fees, dividends, interest e.t.c
For example; IF Mr A during the year a total of N2m has been deducted from your receipts by your clients as withholding tax. In the same year,MR A's liabilites have been calculated as N10m. Before you pay the tax liability of N10m, Mr A MUST deduct the N2m that the Tax Authorities had deducted from your receipts during the year.

Explanation:- The N2m that what withheld at source is seen as an advance payment of your tax and is kept as a credit for Mr A. So to enjoy the benefit of the credit, Mr A must obtain a WHT Credit Note from your client, without this you cannot deduct the N2m before the FIRS.

3) LOSSES

In business, there are times when you make losses in any given year. These losses can be used to reduce the tax payable at periods when profits will be made.
For example, IF Mr Ayo had made an aggregate loss of N1.0m in the last year, then in the current year, Mr Ayo then makes a taxable profit of N1.5m . Rather than being taxed on the N1.5m, Mr Ayo would be taxed on the N500,000 only thus getting a relief of N1m. This is the reason why it is so important to keep proper records and make regular filings of your accounts and annuals returns.

4)Try and Invest in business that are wholly export oriented

Dividends and profits obtained from business that are wholly export oriented are exempted from being taxed in Nigeria. Any business that soley exports the dividends paid out to its shareholder will not be subjected for tax. Also, if a supplier supplies in raw materials that is exclusively required for the manufacture of exports then the profit made by that supplier will also be exempted from tax. Note that such company must provide a Certificate of Purchase of Inputs to the Supplier.


This Tax Avoidance methods are not conclusive, but if applied strictly, and with the help of a Tax consultant would add good value to a business.

spreading corruption

But u complain GEJ is not performing... lol

Tax aviodance is just a means whereby a man would arrange his affairs in such a way so as to reduce his tax burden. So, Tax Avoidance is legal whereas Tax Evasion is illegal. Hope you now understand.

Thank U.

For more info or consultation. Pls mail me: camelotchambers@gmail.com .

interesting piece.

but if i may say, tools for tax avoidance management are numerous however, there is a thin line between tax avoidance and tax evasion (which is against the law).