Corporate - Other taxes

Last reviewed - 28 January 2021

Value-added tax (VAT)

The standard VAT rate is 7.5% (increased from 5% on 1 February 2020).

Zero-rated items include non-oil exports, goods and services purchased by diplomats, and goods and services purchased for use in humanitarian donor-funded projects. Exempt items include plants and machinery for use in export processing zones (EPZs) or free trade zones (FTZs), basic food items (based on a specific list), medical products and services, pharmaceutical products, books and educational materials, and exported services. Commissions on stock market transactions are also exempted from VAT.

Government agencies and oil and gas companies are required to deduct at source VAT charged by their suppliers and remit it to the tax authority. All other organisations are required to collect VAT charged on their invoices from their customers for filing and payment to the tax authority.

The Finance Act has introduced a reverse charge mechanism for services from which no tax invoice was received. VAT returns are now to be filed on a cash basis.

The FIRS has implemented a platform for auto tracking and remittance of VAT known as FIRS VAT-Collect. Some of the users of the system are domestic airlines (for instant remittance of VAT on their ticket sales) and other retailers.

Customs duties

Customs duties in Nigeria are levied only on imports. Rates vary for different items, typically from 5% to 35%, and are assessed with reference to the prevailing Harmonized Commodity and Coding System (HS code).

Excise duties

Excise duty is applicable on beer and stout, wines, spirits, cigarettes, and homogenised tobacco manufactured in or imported into Nigeria at 20%.

Excise duties on tobacco and alcoholic beverages has increased effective 4 June 2018. The new regime applies only to tobacco and its products (such as cigarettes) and alcoholic beverages (beers and stouts, spirits, and wines) as follows:


For 2018, in addition to the 20% ad valorem rate, a specific rate of NGN 1 will be paid on each cigarette stick (NGN 20 per pack of 20 sticks).

In 2019, the specific rate will increase to NGN 2 per stick (NGN 40 per pack of 20 sticks). In 2020, the specific rate will increase to NGN 2.90k per stick (NGN 58 per pack of 20 sticks).

Beer and stout

With respect to alcoholic beverages, no ad valorem rate is applicable.

In 2018, NGN 0.30k per centilitre (cl) is payable on beer and stout. In 2019 and 2020, NGN 0.35k per cl will be payable.


In 2018, NGN 1.25k per cl is payable on wines. In 2019 and 2020, NGN 1.50k per cl will be payable.


In 2018, NGN 1.50k per cl is payable on spirits. In 2019, NGN 1.75k per cl will be payable. In 2020, NGN 2.00k per cl will be payable.

Excise duty will not apply on imported excisable goods not produced in Nigeria and imported raw materials not available in Nigeria.

Property taxes

Property taxes in Nigeria are usually levied annually by the state government with varying rates depending on the state and the location of the property within the state. The two major property taxes are governor’s consent fee and land registration fee. In Lagos (which is the economic hub of Nigeria), governor’s consent fee, land registration fees, and other levies payable to the state give rise to a total levy of 3% of the fair value of the land.

Also, Right of Occupancy fee and tenement rates are chargeable by state and local government authorities.

Stamp duties

Under the Stamp Duty Act, stamp duty is payable on any agreement executed in Nigeria or relating, whatsoever, to any property situated in or to any matter or thing done in Nigeria. Instruments that are required to be stamped under the Stamp Duties Act must be stamped within 40 days of first execution.

Stamp duty is chargeable either at fixed rates or ad valorem (i.e. in proportion to the value of the consideration), depending on the class of instrument. Stamp duty is imposed at the rate of 0.75% on the authorised share capital at incorporation of a company or on registration of new shares.

All deposit banks and financial institutions are required to charge stamp duties of NGN 50 on every eligible transaction above NGN 10,000. There are exemptions for transactions between accounts held by the same bank customer and for salary accounts.

Capital gains tax (CGT)

Gains accruing to a chargeable person (individual or company) on the disposal of chargeable assets shall be subject to tax under the CGT Act at the rate of 10%. There is no distinction between long-term and short-term gains and no inflation adjustment to cost for CGT purposes.

All forms of assets, including options, debts, goodwill, and foreign currency, other than those specifically exempt, are liable for CGT. The gains on the disposal of shares are exempt from CGT.

CGT is applicable on the chargeable gains received or brought into Nigeria in respect of assets situated outside Nigeria.

Capital losses are not allowed as an offset against chargeable gains accruing to a person from the disposal of any assets.

Police Fund Levy

The Act imposes a levy of 0.005% on the 'net profit' of companies ‘operating business’ in Nigeria.

Payroll contribution

Under the Employee Compensation Act, all employers were required to contribute 1% of their payroll cost in the first two years of commencement of the Act (2010 to 2012). Subsequently, assessments were expected to be issued by the Nigeria Social Insurance Trust Fund, the body empowered to administer and implement the Act. In practice, a contribution of 1% of payroll continues to apply.

Pension contributions

Employers with at least 15 employees are required to participate in a contributory pension scheme for their employees. The minimum contribution is 18% of monthly emolument (with a minimum contribution of 10% by the employer and 8% by the employee). If the employer decides to bear all the contribution, the minimum contribution is 20% of monthly emolument. Mandatory and/or voluntary contributions by the employers are deductible for CIT purposes.

National Housing Fund (NHF) contributions

NHF contributions are applicable to Nigerian employees earning a minimum of NGN 3,000 per annum. The employer is required to deduct 2.5% of basic salary from employees earning more than NGN 3,000 per annum and remit it to the Federal Mortgage Bank of Nigeria within one month of deduction.

Information technology levy

A company with an annual turnover of NGN 100 million or more is required to pay 1% of its profit before CIT as information technology tax. This levy is deductible for CIT purposes when paid (typically in the year of assessment following that in which the payment was made).

This tax is applicable to:

  • Banking and other financial activities, including capital and money market operators, mortgage institutions, and micro-finance banks.
  • Insurance activities, including brokerage.
  • Pension fund administration, pension management, and related services.
  • GSM service providers and telecommunication companies.
  • Cyber and internet services providers.

Levy on contracts awarded in the upstream oil and gas sector

The Nigerian Content Development Act was introduced to increase the level of Nigerian participation in the oil and gas industry. The Act imposes a levy of 1% on every contract awarded in the upstream oil and gas sector of the economy. Any violation of the Act is liable for a fine of 5% of the contract value and may result in outright cancellation of the contract.