Tobi Aminu

Every country collects different taxes from its residents and local companies. What are the types of taxes in Nigeria in 2019? Let us describe them all. This will be useful information for everyone who thinks about launching a new business in our country or investing their money into a local project. Types of taxes collected by state government in Nigeria. Nigeria is a modern country with a huge population that accounts for more than 190 million people. All these people are expected to pay taxes if they work, run a company, do freelance projects or earn money in any different way. It is important to know all the different types of taxes in Nigeria because you must pay them correctly and according to your occupation. Non-paying can result in expensive fines that can cut down your profits and make you earn way less than you possibly could. Various types of taxes in Nigeria are collected by Federal Inland Revenue Service shortly abbreviated as FIRS. Types of taxes in Nigeria in 2019? Official website of FIRS lists many types of taxes collected in Nigeria. As of today, there are 9 of them: CIT, WHT, VAT, PPT, PIT, SD, CGT, NITDL, EDT Finances have to be counted, taxes must be paid. You already know what are the types of taxes in Nigeria. Now, let us shortly describe each of them. CIT (Companies Income Tax) This is one of the main types of taxes collected by state government in Nigeria. CIT stands for Companies Income Tax. Each firm or company that is established in our country has to pay tax on its profit. How much is CIT value? Businesses have to pay 30 percent of their overall profit. The time when this tax is paid depends on whether the firm is new or already exists. By the way, if a firm is at least 4-year-old, it could pay the minimum tax. Everything depends on its profit. Such an exemption is possible if the company has made a loss or its payable amount is lower than 30 percent. WHT (Withholding Tax) These three capital letters stand for Withholding Tax. It is also used on the profit and depends on each transaction. Businesses pay it in advance on their income, right after the transaction was made. How much is WHT? Unlike CIT that can get up to 30 percent, WHT tax is way lower. It can range from 5 to 10 percent, and it must be filed for on the twenty-first day of a profitable month. It is necessary to pay Withholding Tax on time. If these types of taxes in Nigeria are paid later than supposed, you would have to pay the penalty, an expensive one. Each new month would add 5,000 Naira to the original penalty of 25,000 Naira per the first month. VAT (Value Added Tax) This is another type of taxes collected in Nigeria in 2019. VAT stands for Value Added Tax. It is usually paid by consumers and it consists of several stages. Customers who go to the store to buy products, goods, food, toys, equipment, service are charged about 5 percent of the cost unless the product is exempted by the Tax Act. The final customers pay this tax however they do not file it every month. This is the task of the company or firm that sells service or goods with VAT. PPT (Petroleum Profits Tax) This abbreviation stands for Petroleum Profits Tax. This is one of the various types of taxes in Nigeria that are only paid by firms involved in different operations in the petroleum sector of the economy. The income of such companies can be only liable to PPT and not CIT (on the same profit). The tax can get as high as over 65 percent per the company’s profit for some firms, or it can get even higher up to 85 percent for some petroleum firms. Sometimes PPT tax can be as low as 50 percent if the firm operates under the production sharing contract. Those companies that fail to file their taxes on time are usually charged 10,000 Naira penalty which can grow by 2,000 Naira by each additional day of failure. PIT (Personal Income Tax) What is PIT? This is a Personal Income Tax, another popular type of taxes collected in Nigeria. Each individual who earns any type of profit has to pay taxes, and the amount paid can vary from 7 to 24 percent. If you are a Nigerian, you must pay 20 percent of your gross income plus either 1 percent on top of it the annual income is under 300,000 Naira. Non-payment would result in an unpleasant penalty which can vary from 5,000 to 500,000 Naira depending on whether you are a business owner or employer. SD (Stamp Duties) Did you know that there is a special tax on written documents in Nigeria? It is called SD or Stamp Duties. If a company executes documents between itself and other people (groups, individuals), it is obliged to pay SD taxes. Some individuals who execute documents between themselves are also responsible for paying Stamp Duties on time. These documents can include guarantor forms, bills of exchange, deed of assignment and others. CGT (Capital Gains Tax) If you own any form of property in Nigeria or outside the country, you are obliged to pay CGT or Capital Gains Tax. How much is this tax? You have to pay a flat rate of 10 percent of all chargeable assets. NITDL (National Information Technology Development Levy) Among all the various types of taxes in Nigeria, NITDL is also present. This abbreviation stands for the National Information Technology Development Levy. Only some firms pay this particular tax, and only if their minimum turnover gets over 100 million Naira. The list of such companies usually includes financial organizations, banks, GSM and internet service providers, insurance corporations, etc. How much is NITDL? Its flat rate is 1 percent, and it is paid on the company’s profit

The Federal Capital Territory Administration (FCTA) said that it has so far identified and captured, in its database, over one million taxpayers in the Federal Capital Territory (FCT), who have received their Taxpayer Identification Numbers (TIN), through personalised SMS. The executive chairman, FCT Internal Revenue Service (FCT-IRS), Abdullahi Attah, who disclosed this to newsmen in his office, added that taxpayers’ registration and issuance of Tax Identification Number (TIN) is a continuous process in the territory. Attah, therefore advised FCT residents who are yet to get their TIN to visit any of the 10 FCT-IRS offices and obtain same through a process that lasts for not more than 10 minutes. He revealed that the service has developed partnership with all the commercial banks and key payment platforms to enable taxpayers pay their tax wherever they are in the world. The executive chairman also reminded employers of labour that they have a duty under the law, to deduct correct amount of PAYE from their staff and remit to FCT-IRS immediately after every deduction, adding that non-deduction of PAYE and late remittance attract penalties. He continued: “One of our main objectives is to ensure that all taxpayers in the FCT file their annual tax returns in the manner and within the time specified by law. Filing of annual tax returns is mandatory on each and every taxable person, whether under formal employment or in the informal sector.” Source: Leadership Newspaper

Mr Victor Olomo, the Managing Director, Process Concepts and Technologies (PROCONTEC) Ltd, has urged Federal Government to consider granting low interest loans and tax holidays to manufacturers and exhibitors at the ongoing Science and Technology Expo taking place in Enugu. He made the call in a telephone interview with News Agency of Nigeria (NAN) on Wednesday. Organised yearly by Federal Ministry of Science and Technology to encourage interaction among researchers, inventors, innovators and investors, the Science and Technology Expo was to largely commercialise research results from the country’s tertiary institutions. The theme for the 2019 expo is “Science, Technology and Innovation for Economic Recovery and Sustainable Growth.” Olomo, who said that the expo was an opportunity for indigenous manufacturers to showcase their products to the world, added that the event was also an avenue to link up government agencies especially in the area of research and development. He said that the expo brought together people involved in technology from all sectors to showcase different resources available in the country, as well as products they were able to add value to. According to him, the principal source of the country’s foreign exchange is oil but it cannot sustain the economy as many countries that buy the oil are going into non-fuel vehicles, hence the need to have alternatives. “So, where do we go from there if we don’t develop our resources. Many developed countries also organise such expo at national and international level to showcase what they have so as to attract patronage and collaboration,” he said. He, therefore, urged the exhibitors to take advantage of the exposure to reach out to investors that could commercialize their products. Source: BusinessDaily

The board of Meyer Plc has reacted to a media report last week that its head office located in the Ikeja area of Lagos State was sealed by officials of the Federal Inland Revenue Service (FIRS) also last week. In a statement, Meyer confirmed that truly, officials of the tax agency were at its office with a warrant to seal the property, but emphasised that after showing evidence of tax payment to them, the company was “re-opened.”  It was alleged that Meyer owed the sum of N54,658,701.00 in respect of the 2016 Year of Assessment. “On behalf of the Board of Directors and entire staff of Meyer Plc., we hereby issue this statement in accordance with the rules and directives of the Nigerian Stock Exchange to our esteemed shareholders, in relation to the publication recently made in the Nation Newspaper on 10th January 2019, with respect to the shut-down exercise conducted by the Federal Inland Revenue Service (FIRS) at the Company’s Head Office. “On 11 th Jan. 2019, our attention was drawn to a publication on page 45 of The Nation Newspaper dated 10th January 2019, and captioned, “Tax Debt – FIRS Shut down DN Meyer, Morison, Others.” We wish to clarify as follows: “The Federal Inland Revenue Service (FIRS) enforcement officers came to our office on Monday, 7th January 2019 with a warrant of distraint dated 7th Jan 2018. It was stated in paragraph 2 of the said warrant that DN Meyer Plc (now known as Meyer Plc) had arrears of Company Income Tax amounting to the sum of N54,658,701.00 in respect of the 2016 Year of Assessment. “We subsequently furnished the relevant documents showing tax returns and payments for the year of assessment in question to FIRS and these were deemed sufficient for the enforcement team to re-open our office on the same day. “We appreciate our investors and the Exchange for the concerns expressed and reassure you that the Management will continue to engage and co-operate with the FIRS,” the statement issued today said. Source: Business Post

OSOGBO—GOVERNOR Gboyega Oyetola of Osun State has described payment of taxes as necessary support to support the development of the state. Oyetola Speaking during Iresi Day, in Iresi, Boluwaduro local government area, Oyetola said that  prompt and sincere payment of taxes by various categories of residents is an important civic duty, immediate implication of which is more available funds for government to undertake critical projects, including roads. His words: “I congratulate our people in this town on another historic occasion. It is an annual programme, but this will be my first time here. Let me quickly say that your request for roads is normal. Our people across the state have been requesting same. A way to support government in actualising this is to pay your taxes promptly. We will do your roads, but pay your taxes”   Urging the youth to shun violence, cultism and thuggery, as these would compromise peace in the communities, the governor, in a release by his Chief Press Secretary, Niyi Adesina, explained that the event was evidence of promotion of Yoruba culture and values, which he said would be aided when history is returned to schools as teaching subject. He said: “I want to warn the youth not to accept thuggery contracts from politicians. Parents should encourage their children to learn a skill. Today, if you want good and dependable artisans, like bricklayer, carpenter or tiller, you go to Cotonou. This trend must stop.” He equally encouraged parents to allow their children and wards to acquire vocational skills, noting that the better way to cope in life is to have a vocation to fall back on, as it is increasingly impossible for government to provide jobs for every able and qualified graduate. Lagos 2019 budget already in the House- Budget commissioner Monarchs in attendance included Oba Sikiru Adedoyin Ibiloye (Iresi), and Oba AbdulRasheed Ayuotunde Olabomi, Odundun IV (Iragbiji), alongside APC national and state assembly candidates in coming February elections. Source: Vanguard

The Director General of the Lagos Chamber of Commerce and Industry, Muda Yusuf, has called on the Federal Government to grant the education and the health sector tax holiday, to help mitigate the imminent social crisis bewildering the sectors. Vanguard Economic Discourse Muda made this known during a panel section at the Vanguard Economic Discourse on Human development index Vs economic growth in Lagos According to him, “The public and primary schools have practically collapsed. The public health institutions are practically collapse. ADVERTISING “We find a situation today where you have more private schools in many of the states they are public schools. We are faced with a situation today where we have more private hospitals than the public hospitals, that goes to show the role that private hospitals are playing even in the social sector space. “It also underscores the fact that the resources of the states are dwindling by the day and making it difficult for the government to discharge some of its fundamental obligations in the social space namely, issue of educations, health and even security. “The Federal Government should not be taxing a private school, either primary, secondary or university the way you are taxing a bank or an oil company, because they are helping to support the government to deliver on some key social objective. “We should grant them complete tax holiday and all the input into the educational sector, either education material, laboratory materials all this should come into the country free of import duty. So that the private sector may be able to complement the effort of the government in delivering quality human capital because we need human capital to drive the economy. Source: Vanguard