Nigeria

Employment income

Employers can pay or provide, among other items, basic salaries, housing allowances, transport allowances, utilities, lunch allowances, leave allowances, bonuses, compensations, club subscriptions, clothing allowances, leave passage, insurance premiums, and certain reimbursements to their employees. The entire list is fully taxable except for reimbursements supported with third party invoices/receipts and reasonable relocation expenses.    

Employers may also provide cars and accommodation for their staff. If a company provides accommodation for an employee, the employee is taxed on the annual rental value of the accommodation, subject to a maximum of 20% of annual gross income from the employment, excluding the rental value. If a car is allocated for an employee's use, 5% of the cost of the car will be treated as benefit-in-kind that will form part of the employee's taxable income.    

The provision of canteen meals for staff, provision of uniform, overall or other protective clothing, work tools are generally not treated as part of the employee's taxable income. Reimbursements, such as car maintenance, are tax exempt to the extent that the expenses have been incurred and there is no element of profit to the employee.  

Chargeable gains (previously capital gains)

Chargeable gains are now included in an individual’s total income and taxed at the applicable progressive personal income tax rates (0 – 25%), rather than the previous CGT rate of 10% . See Capital gains tax in the Other taxes section for more information.

Investment income

Dividends, interest, rent, or royalties derived and brought to Nigeria in convertible currency through government approved channels and paid into a local account in an approved bank is exempt from Nigerian tax.  

Employment expenses 

NHF contributions, National Health Insurance Scheme contributions, life assurance premiums (including deferred annuities), national pension scheme contributions, and expenses which have been wholly and exclusively incurred in generating income from trade, business, profession, or vacation are deductible.    

Interest on loan for developing an owner-occupied residential house is deductible from employment compensation.