Nigeria, a country located in West Africa along the Gulf of Guinea on the Atlantic Ocean, is a federal constitutional republic comprised of 36 states and its Federal Capital Territory, Abuja. English is the official language of Nigeria, and its currency is the Nigerian naira (NGN).
Nigeria became the largest economy in Africa after rebasing in 2014. The gross domestic product (GDP) is estimated at 397 billion United States dollars (USD) for 2018 based on the information available from the Nigerian Bureau of Statistics.
As a developing country, Nigeria has been recognised by prominent members of the global investment community and economists as an up-and-coming market with tremendous growth potential over the next decades. A member of the Organisation of Petroleum Exporting Countries (OPEC) since 1971, Nigeria ranks as the largest oil producer in Africa and the 11th largest in the world. In addition to oil and gas, Nigeria has vast underexploited mineral resources, including coal, bauxite, gold, and iron ore. The country's natural resources have attracted the attention of the super major oil and gas companies as well as businesses in allied industries, including oil field equipment and services, transportation and logistics, and petrochemicals and plastics.
As the seventh most populous country in the world, Nigeria is also rapidly expanding its infrastructure and witnessing foreign and domestic investment from major players in the engineering and construction industry as well as the telecommunications sector. The financial services segment also continues to expand in Nigeria as international banks and investors look to capitalise on the expansion of the West African market.
Nigeria’s tax compliance rate is significantly low compared to other countries, especially given the weak revenue administration capacity to deal with evasion and lack of data mainly around the informal sector. The present administration is currently pursuing tax reforms that are geared towards achieving a business friendly environment and simplified tax administration. The Federal Government of Nigeria established the Presidential Enabling Business Environment Council (PEBEC), which was constituted by the President in August 2016, to address issues associated with the ease of doing business in Nigeria. As part of its commitment to achieving its objective of creating a conducive business environment in Nigeria, some of its initiatives with regards to paying taxes include:
- Automatic registration for taxes upon incorporation.
- Implementation of an Integrated Tax Administration System (ITAS) that will enable taxpayers to file tax returns and pay their taxes online. This is being implemented in phases. However, the implementation is facing certain challenges. State tax authorities and other tax authorities are slowly adopting the use of online platforms to aid compliance and reduce compliance costs for taxpayers.
- Reforms in the Federal Inland Revenue Service (FIRS) to ensure that issues raised by taxpayers are dealt with on a timely basis.
- Obligation of the FIRS to issue tax clearance certificates (TCCs) to qualifying taxpayers not later than two weeks from the date of application.
On 8 October 2019, the President presented the Finance Bill 2019 alongside the 2020 National Budget to the National Assembly. On 13 January 2020, the President of the Federal Republic of Nigeria, Muhammadu Buhari, signed the Nigerian Tax and Fiscal Law (Amendment) Bill 2019, otherwise known as the Finance Bill, into law.
In response to the COVID-19 pandemic, the FIRS and certain state Internal Revenue Services of the respective states issued tax palliatives to taxpayers, such as:
- Extension for filing deadlines.
- Reduction in tax rates.
- Suspension of field tax audit and investigation exercises.
- Utilising digital platforms to file returns.
- Reduced filling requirements.
Further to the enactment of the Finance Act 2019, in May 2020, the Ministry of Finance released the Companies Income Tax (Significant Economic Presence) Order 2020. The Order is effective 10 February 2020 and brings into the Nigeria income tax net foreign companies rendering remote services and digital transactions to Nigerian customers.
In what is becoming an annual tradition, the Finance Act 2020 was passed by the National Assembly and signed into law by the President on 31 December 2020. The Finance Act which comes into effect from 1 January 2021 compliments the 2021 Federal Government's Budget of Economic Recovery and Resilience.
The FIRS has released the TaxPro-Max platform for tax compliance. TaxPro-Max becomes the channel for filing Naira-denominated tax returns. It is expected that this platform will be updated for foreign currency returns in the near future.
On 1 July 2021, both houses of the National Assembly passed the Petroleum Industry Bill. The Bill proposes various changes to the industry in relation to governance, regulatory framework, fiscals and host community relations.
PwC has been operating in Nigeria since 1953 through its predecessor firms of Coopers & Lybrand and Price Waterhouse. We are one of the leading professional services firms in Nigeria, with offices in Lagos, Abuja, and Port-Harcourt, over 1,000 staff, and 31 resident partners.
We are committed to serving as a force for integrity, good sense, and wise solutions to the problems facing our clients. We are guided by one promise: to do what is right, be it with our people, clients, community, or environment. Our clients range from the biggest, most complex global establishments to smaller, newer businesses both privately owned and those in the public domain. Our Tax services meet the needs and requirements of each client, irrespective of size or location.
|Corporate income tax (CIT) rates|
|Headline CIT rate (%)||
30% for large companies;
20% for medium companies;
0% for small companies
|Corporate income tax (CIT) due dates|
|CIT return due date||
Within six months of the financial year-end. For new companies it is the earlier of six months from its first accounting period or 18 months from incorporation.
|CIT final payment due date||
On or before the due date for filing.
|CIT estimated payment due dates||
On or before the due date for filing.
|Personal income tax (PIT) rates|
|Headline PIT rate (%)||
|Personal income tax (PIT) due dates|
|PIT return due date||
Employer PAYE returns are due by 31 January whilst individual returns are due by 31 March.
|PIT final payment due date||
Expected to be paid when individual returns are filed.
|PIT estimated payment due dates||
PAYE must be remitted on or before the 10th day of the month following the month in which salaries were paid.
|Value-added tax (VAT) rates|
|Standard VAT rate (%)||
|Withholding tax (WHT) rates|
|WHT rates (%) (Dividends/Interest/Royalties)||
Resident: 10 / 10 / 10;
Non-resident: 10 / 10 / 10;
For non-residents, the WHT rate will be reduced to 7.5% through the use of a DTT. There are administrative requirements to claim the treaty benefits.
|Capital gains tax (CGT) rates|
|Headline corporate capital gains tax rate (%)||
|Headline individual capital gains tax rate (%)||
|Net wealth/worth tax rates|
|Headline net wealth/worth tax rate (%)||
|Inheritance and gift tax rates|
|Headline inheritance tax rate (%)||
|Headline gift tax rate (%)||