Tax Types
Tax is imposed on individuals who are either in employment or are running their own small businesses, under a business name or partnership. There are various tax types ranging from Personal Income Tax, Withholding Taxes, Stamp Duties and more.
Personal Income Tax (PIT) is a tax imposed on the income of individuals. It applies to income from employment, trade, business, profession, vocation, investments and other taxable sources, subject to applicable exemptions, reliefs and deductions under the law. Personal Income Tax for individuals resident in Niger State is generally administered by the Niger State Internal Revenue Service (NGSIRS), subject to the jurisdictional provisions of applicable tax laws. For employees, Personal Income Tax is deducted through the Pay-As-You-Earn (PAYE) system. Employers are required to deduct the appropriate tax from employees' taxable emoluments and remit the amount to the relevant tax authority not later than the 10th day of the month following the deduction. Individuals earning income from trade, business, profession, vocation or other taxable sources are required to declare their income and comply with applicable self-assessment and filing requirements. Where an annual income tax return is required, it must be submitted to the relevant tax authority not later than 31 March of the relevant year of assessment in respect of the preceding basis period. Employers are required to file annual returns in respect of their employees not later than 31 January each year. Under the Nigeria Tax Act 2025, individual income tax is charged progressively after applicable exemptions, reliefs and deductions. The first ₦800,000 of taxable income is taxed at 0%, while subsequent taxable income bands are taxed at rates ranging from 15% to 25%.
Withholding Tax (WHT) is a way of collecting income tax in advance. It is deducted from certain payments when they are made. The person or organisation making the payment deducts the applicable amount and remits it to the relevant tax authority on behalf of the person receiving the income. For example, where a person provides a service and the payment is subject to Withholding Tax, the person or organisation making the payment deducts the applicable tax from the amount payable to the service provider and remits the tax deducted to the relevant tax authority. The remaining amount is paid to the service provider. Withholding Tax is generally not an additional tax. For a resident taxpayer, the amount deducted may be used as a credit against the taxpayer's income tax liability, subject to applicable tax laws and regulations. Withholding Tax applies to specified payments and transactions, which may include rent, interest, dividends, royalties, commissions, professional fees and payments for certain contracts and services. The applicable rate depends on the type of transaction and the category and residence status of the person receiving the payment. Where the person receiving the income is an individual whose tax affairs fall under the jurisdiction of Niger State, the applicable Withholding Tax is administered by the Niger State Internal Revenue Service (NGSIRS), in accordance with applicable tax laws and the Deduction of Tax at Source (Withholding) Regulations. A person or organisation required to deduct Withholding Tax must remit the amount deducted to the appropriate tax authority within the period prescribed by law and, where required, provide the recipient with evidence of the deduction. Not every payment is subject to Withholding Tax. Certain transactions and persons may be exempt from deduction under applicable laws and regulations. Taxpayers who are unsure whether Withholding Tax applies to a particular payment or transaction should seek clarification from NGSIRS.
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