Nigeria

Pension contributions

The Pension Act signed on 1 July 2014 provides that employers with at least 15 employees are required to participate in a contributory pension scheme for their employees. Organisations with less than 3 employees or self-employed persons are entitled to participate in the scheme. The minimum contribution under the Act 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   employees to schemes approved by the Pension Act are deductible for tax purposes.    

The Law also requires every employer to take out Group life insurance coverage for its employees for a minimum of three times the annual emolument of the employee.  

National Housing Fund (NHF) contributions

NHF contributions are applicable to employees and self-employed persons inNigeria earning the minimum wage and above.  The employer is required to deduct 2.5% of the monthly income from employees and remit it to the Federal Mortgage Bank of Nigeria within one month of deduction. Private sector employees are now excluded from compulsory compliance with this obligation and may hence forth contribute the requisite 2.5% of their monthly income to the NHF voluntarily.  The contributions remain compulsory for employees working in the public sector.  

Value-added tax (VAT)

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

Zero-rated items include but are not limited to basic food items, medical products and services, pharmaceutical products, educational books and materials, fertilizers, locally produced animal feeds and exported goods excluding oil and gas. 

Net wealth/worth taxes

There are no net wealth/worth taxes 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. Also, Right of Occupancy fee and tenement rates are chargeable by state and local government authorities.