charlesvure:
Small businesses pay an average of 19.8 percent in taxes depending on the type of small business. Small businesses with one owner pay a 13.3 percent tax rate on average and ones with more than one owner pay an average of 23.6 percent. Small business corporations (known as “small corporations”) pay an average of 26.9 percent, according to the Small Business Administration.

Large business. The CIT rate is 30% for large companies (i.e. companies with gross turnover greater than NGN 100 million), assessed on a preceding year basis (i.e. tax is charged on profits for the accounting year ending in the year preceding assessment).

alphaconde:


thanks for schooling me joor

God bless u

ascek:
For a business man who owns a bnx Nig Ltd., Assuming he has a starting capital of 2,000,000 in naira and at the end of the financial year he makes 500,000 in naira after paying salaries for himself and workers and every other things. How much of this 500,000 will government charge as tax and how is it calculated? Thanks as you provide answers

ascek:
For a business man who owns a bnx Nig Ltd., Assuming he has a starting capital of 2,000,000 in naira and at the end of the financial year he makes 500,000 in naira after paying salaries for himself and workers and every other things. How much of this 500,000 will government charge as tax and how is it calculated? Thanks as you provide answers

ThierryJay:


OP, Let me simplify this for you.

The only relevant information you provided to answer your question, is that you made a net profit of N500thousand. You did not provide info about your company's turnover. Therefore, I will clarify based on assumed scenarios.

If your annual revenue/turnover that generated the 500k profit is less than N25million, you are exempted from paying any corporate income tax to the Government on the 500k profit. This is because you will be considered as a small company.

If your turnover is between N25 - 100million, you will pay 20% of your taxable profit as corporate tax. (Note that taxable profit is not the same as your 500k here but is calculated based on specific rules in the tax law).

Also, note that your company is not required to pay any VAT (different from income tax) to the Government where your annual turnover is less than N25million. The current VAT rate is 7.5% and your company will only be required to include it in your invoices to your customers and remit it to the FG where your yearly revenue is above 25million.
This response will give intending entrepreneurs some knowledge on how Tax works in Nigeria

Coronavirus84:

VAT in supply is 7.5% , WHT is 5% and Stamp duty is 1%

prekumohtim:


Consult an accountant with you money. Stop looking for free services. You will soon ask us to help you balance your books of account

thebosstrevor1:


THIS IS THE CORRECT ANSWER. BUT THAT IS THE NEW FEDERAL TAX LAW

BEFORE IT WAS A FIXED RATE OF 30%

The state also have their own tax like Business Premises Tax.

ascek:
For a business man who owns a bnx Nig Ltd., Assuming he has a starting capital of 2,000,000 in naira and at the end of the financial year he makes 500,000 in naira after paying salaries for himself and workers and every other things. How much of this 500,000 will government charge as tax and how is it calculated? Thanks as you provide answers

ThierryJay:


Yes, business premises tax is 5k per location.

The 30% you are referring to is the corporate tax and not VAT. VAT was formerly 5% but now 7.5%.

thebosstrevor1:


I never wrote about vat.

30% tax was for all business inrespective of size before.

Now some companies are exempted from paying company income tax in the new finance bill.

If your turnover is less than 25million, you don't have to file company income tax.

Mide3367:
As a complete company, what are the various tax one pay to government? Who can help me summarise tat? I run a company Hollyway Global Investment. It has a corporate acct but I haven't paid any government levi at all

prodigyy:
The system is not really solid. You can eventually evade tax if you're smart.

Sezua:

Oga, pay an accountant to consult for you, before nairaland scattered accountants teach you nonsense.

you can reach out to me via dm. PS, I'm going to only give you a brief summary if you do reach out.

thebosstrevor1:


I never wrote about vat.

30% tax was for all business inrespective of size before.

Now some companies are exempted from paying company income tax in the new finance bill.

If your turnover is less than 25million, you don't have to file company income tax.

Chii59:
Personal income tax is 7.5% on the profit you made.

Mide3367:
how much be ur charges oga

gendebs:
Different tax summaries and narration.

Let me help you out

Tax is collected monthly or annually
Monthly Tax you are subjected to are PAYE and VAT

VAT is subjected to be tax at 7.5% of invoice or quoted price if the business meets N25,000,000 turnover threshold. It's also know as consumption tax. Thou, some service and goods are exempted or waived from paying VAT irrespective of the business turnover. It's remitted to FIRS

PAYE is know as pay as you earn. The higher your earnings the higher your tax but from January 31st, employee that earns less than N30,000 monthly are exempted from this tax. It's remitted to the state internal revenue of your resident.

CIT also is subjected to 20% of profit (turnover less Cost of sales and expenses) if the business meets N25,000,000 naira threshold and 30% of profit if the business meets N100,000,000 and above threshold.

U can check my signature if you need further clarification

Israeljones:

25,000,000 monthly or yearly?

gendebs:
Different tax summaries and narration.

Let me help you out

Tax is collected monthly or annually
Monthly Tax you are subjected to are PAYE and VAT

VAT is subjected to be tax at 7.5% of invoice or quoted price if the business meets N25,000,000 turnover threshold. It's also know as consumption tax. Thou, some service and goods are exempted or waived from paying VAT irrespective of the business turnover. It's remitted to FIRS

PAYE is know as pay as you earn. The higher your earnings the higher your tax but from January 31st, employee that earns less than N30,000 monthly are exempted from this tax. It's remitted to the state internal revenue of your resident.

CIT also is subjected to 20% of profit (turnover less Cost of sales and expenses) if the business meets N25,000,000 naira threshold and 30% of profit if the business meets N100,000,000 and above threshold.

U can check my signature if you need further clarification

Israeljones:

What rate do you feel is best taxable or charged on Monthly salary of 50k upwards because i know The PAYE varies..

gendebs:


PAYE is a progressive tax. The rate is not fixed, the higher you earn the more the tax you are paying.

Also, they are statutory deductions(PENSION, INSURANCE, NHF etc) that is deducted from taxable income of the tax payer.

Israeljones:

so there is no fix rate to charge.... Like u said the higher the salary the higher the tax... i just want to know the statutory percentage charged