Corporate Tax

Main rate: 30%, plus education tax, 2%

Nigerian companies are taxed on their worldwide income, with a credit for foreign tax paid; foreign companies are taxed on Nigerian-source income only. A Nigerian company is a company incorporated under Nigerian law. Corporate tax is generally charged at 30% based on total profit. An education tax is charged at 2% based on assessable profit, and a minimum tax applies. A 10% withholding tax is deducted from dividend payments to companies and individuals. Capital gains are taxed separately.

Individual Tax

Progressive rates to 25%

Resident individuals are taxed on their worldwide income; non-residents are subject to tax on Nigerian-source income only. A person who is in Nigeria for 183 days in the tax year is regarded as resident. Tax is charged at progressive rates up to 25% on total income. Dividends received are grossed up and included in total income, with a credit for the withholding tax deducted. A minimum tax of 0.5% of total income applies. Capital gains are taxed separately. Under a proposed tax reform, the top individual tax rate would rise to 35%, and employees would be entitled to a tax-free allowance of 40% of their total income.

Capital Gains

Gains are taxed at 10%

Companies and individuals are liable to capital gains tax at 10%. Exemptions from capital gains tax include gains on motor vehicles that are not normally used for commercial purposes, gains on furniture and fittings, gains on gifts, gains on stocks and shares, and gains on life-assurance policies.