Employers can pay or provide, among other items, basic salaries, housing allowances, transport allowances, utilities, lunch allowances, leave allowances, 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 ratable value of the accommodation. 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 is 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.
The cost of the chargeable asset and the associated cost of disposal are deducted from the sales proceeds to determine the chargeable gains, which are subject to CGT at 10%. See Capital gains tax in the Other taxes section for more information.
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.