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 June 10th, 2016  | Tax

income tax: Word cloud concept illustration of income tax

The personal income tax in Nigeria stands at 24% as per the 2011 amendment. The older rates that were imposed by the government have also been revised in the 2011 amendment and it has made sure that the person earning over 3.2 M Nigerian Naira are charged at the revised rate of 24% as compared to the older rates for which the threshold was set at 1.6 M Nigerian Naira and the rate of tax was 25%. There are several other changes that have been made in the personal income tax act. Few of them are listed as below:

  1. The tax rate on the gross income has been augmented from 0.5% to 1%.
  2. According to the amendment the appeal against the unresolved case will be decided by the Tax appeal tribunal.
  3. The government has also removed the 1% bonus on filing the early assessment for all the individual tax payers.
  4. Interest on the WHT or withholding tax will be the same as that of the interest of the monetary policy of the Central Bank of Nigeria.
  5. Previously the filing date of the income tax return was 31st March that has been changed to 31st
  6. The 5% of the total revenue collected by the tax authorities of any genre has to be withholding to make sure that the administrative expenses are met.
  7. Tax officers or inspectors are now bound to contact the high court to seek the warrants in case any of the individual tax payers has not submitted the return within time as per the rules and regulations defined by the law.
  8. Corporate bonds that have been purchased by the individuals are exempted from tax as compared to the law that prevailed before.
  9. Individual tax clearance certificates are now mandatory to change the ownership of cars and other vehicles and land title transfer.

Following is a table that has been drawn specifically to highlight and segregate all the changes that have been made within the personal income tax law in 2011.


Old Bands Old Rates New Bands New Rates
First      N30,000 5% First        N300,000 7%
Next      N30,000 10% Next        N300,000 11%
Next      N50,000 15% Next        N500,000 15%
Next      N50,000 20% Next        N500,000 19%
Above   N160,000 25% Next        N1,600,000 21%
Above     N3,200,000 24%

The amendment in the act was finalized on 14 June 2011 but it was presented to the public in the 4th quarter of the same year which made it almost impossible for some personal income tax payers to file the returns and for which the government was severely criticized. All the tax experts of the country also criticized the government saying that the amendment should have been presented to the public on the date it was formulated, drafted and finalized. All the expatriates also fell prey to personal income tax especially the ones the countries of which did not have a double tax agreement with Nigeria.   Nigeria Accounting, Tax, Audit & Investigation service  08038460036,

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