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Nigeria Individual - Deductions

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Deductions for tax purposes are granted if the expenses meet the criteria for allowable deductions. Allowable deductions are expenses incurred wholly, exclusively, necessarily, and reasonably in the production of taxable income

Employment expenses

NHF contributions, National Health Insurance Scheme contributions, life assurance premiums, national pension scheme contributions, and gratuities are deductible.

Mortgage or other loan interest relating to owner-occupied accommodations is deductible from employment compensation.

Personal deductions

Charitable contributions

Donations made to research centres are deductible, subject to a maximum of 10% of an individual's taxable income.

Healthcare expenses

Medical expenses and insurance premiums are deductible.

Life insurance premiums

Relief for life insurance premiums for the taxpayer and the taxpayer's spouse is restricted to the actual premium paid to an insurance company by the individual during the year preceding the year of assessment.

Standard deductions

There is no blanket or standard deduction for expenses.

Personal allowances

Allowance Limit
Consolidated relief allowance Higher of NGN 200,000 or 1% of gross income plus 20% of gross income *
Child allowance NGN 2,500 for each child, up to a maximum of four children, provided that none is above 16 years of age or married. However, a relief can be granted for a child over 16 years of age if the child is in a recognised school, under artisanship, or learning a trade.
Dependent relative NGN 2,000 for each dependent relative, up to a maximum of two relatives who are widowed or infirm.

As a result of the consolidated relief allowance of at least 21% of gross income, the top marginal tax rate is 18.96% for income above NGN 20 million as only 79% of income is taxed at 24%; however, for income below NGN 20 million, the marginal rate is 19.2%.

* 'Gross income' means wages, salaries, allowances (including benefits in kind), gratuities, superannuation, and any other income derived solely by reason of employment.

Business deductions

Examples of deductible business expenses include:

  • Interest on money borrowed for business purposes.
  • Rent and premium payable on land or buildings occupied for the purpose of acquiring the income.
  • Repairs and maintenance expenses for premises, plant, or machinery used in generating income.
  • Bad debts.
  • Subscriptions, provided they relate to the business or profession.

Last Reviewed - 31 July 2019

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Nigeria contacts
Taiwo Oyedele Title = Taiwo Oyedele width=55px
Taiwo OyedelePartner / Head of Tax & Regulatory Services+234 1 271 1700 ext. 50002
Russell Eastaugh Title = Russell Eastaugh width=55px
Russell EastaughPartner / Director General Tax Services+234 1 271 1700 ext. 50001
Emuesiri Agbeyi Title = Emuesiri Agbeyi width=55px
Emuesiri AgbeyiPartner / Director Tax and Private Wealth Services+234 1 271 1700 ext. 50006
Kenneth Erikume Title = Kenneth Erikume width=55px
Kenneth ErikumePartner / Director Tax Reporting & Strategy+234 1 271 1700 ext. 50004
Chijioke Uwaegbute Title = Chijioke Uwaegbute width=55px
Chijioke UwaegbutePartner, Insourced Solutions for Tax+234 1 271 1700 ext. 54031
Seun Adu Title = Seun Adu width=55px
Seun AduPartner / Director Tax and Transfer Pricing+234 1 271 1700 ext. 52001
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