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Guide to Business in Nigeria





In Nigeria, all persons in employment, individuals in business, non residents who derive income from Nigeria as well as companies that operate in Nigeria are liable to pay tax.


Some taxes are payable to the Federal Government (and administered by Federal Inland Revenue Service), some are payable to the State Governments and some to Local Governments. For a complete listing of which tax is payable to which level (or tier) of Government, please see Taxes and Levies (Approved list for collection) Act. No 21 of 1998


There is usually a Body of Appeal Commissioners that is a court of first instance to handle Tax appeal cases. There is also a Value Added Tax Tribunal


The different taxes are as listed below


Name of Tax

Law authoring the tax

Brief description of the tax




Capital Gains Tax

Capital Gains Tax Act.

Chapter 42. LFN 1990

A 10% tax imposed on Capital Gains arising from a sale, exchange or other disposition of properties known as chargeable assets.


Companies Income Tax

Companies Income Tax Act

Chapter 60. LFN 1990

A tax chargeable on all companies (other than Companies engaged in petroleum operations as defined under the PPTA) registered in Nigeria.


Education Tax

Education Tax Act

No 7 of 1993

A tax chargeable on all companies registered in Nigeria at 2% of chargeable profits as contribution to the Education Tax Fund.


Personal Income Tax

Personal Income Tax Act

No 104 of 1993

A tax payable by all individuals and registered businesses and partnerships except those registered under Part A of Companies and Allied Matters Act 1990.


Petroleum Profits Tax

Petroleum Profits Tax Act

Chapter 354. LFN 1990

Tax charged at 85% of the chargeable income for companies engaged in petroleum operations as specified under the Act.


Stamp Duties

Stamp Duties Act

Chapter 411. LFN 1990

Stamp Duty is Chargeable according to a scale fixed by the Joint Tax Board.


Value Added Tax

Value Added Tax Act

No 102 of 1993

A tax payable by the consumer at 5% of the net value added based on eligible transactions once consumed.


All registered businesses are expected to register and have a VAT registration certificate, and boldly display their VAT registration number on all invoices.


Withholding Tax


This is not really a tax.


It is an advance payment of tax (at 10%) to which individuals and organizations are entitled to demand a withholding tax credit note.