Helen E. Ijewere
by Helen E. Ijewere
All expatriate individuals who are resident in Nigeria are required to pay Personal Income Tax. The Personal Income Tax Act is the relevant law.
Residency determines the taxability of an expatriate individual to Personal Income Tax. An expatriate must be resident in Nigeria for at least 183 days within any 12 month period to be liable to Personal Income Tax. The 183 days includes days for annual leave and temporary absence from Nigeria. An expatriate with a permanent resident status (CERPAC or STR visa) is deemed to be tax resident in Nigeria.
Personal Income Tax is chargeable on income earned inside or outside Nigeria which includes “any salary, wage, fee, allowance or other gain or profit from employment including compensations, bonuses, premiums, benefits or other perquisites allowed, given or granted by any person to any temporary or permanent employee other than so much of any sums as or expenses incurred by him in the performance of his duties, and from which it is not intended that the employee should make any profit or gain.”
The tax rate is progressive, from 7% to 24%. The top marginal rate is 24%.
Types of Personal income Tax
The two types of Personal Income Tax are Pay As You Earn and Direct Assessment.
Pay As You Earn (PAYE)
PAYE is paid by all individuals in paid employment. The employer is mandated to compute and deduct PAYE from the gross salary of the expatriate employee and remit to the relevant State Internal Revenue Service (SIRS) by the 10th day of the month following the month of deduction. The PAYE is deducted and remitted to the relevant SIRS in the currency of payment. The employer is also mandated to file Annual PAYE Returns by 31 January of each year.
Direct Assessment
Self-employed persons are expected to voluntarily declare their income and assess it to Personal Income Tax. Annual Returns are due by 31 March of each year and are filed on a preceding year basis.
Online Filing
A number of State Internal Revenue Services have commenced online filing of PAYE and Personal Income Tax Returns. It is important to check to confirm the process for each State.
GGI member firmNolands More than 10 offices throughout Africa T: +234 802 318 2843Advisory, Auditing & Accounting, Fiduciary & Estate Planning, Tax
Nolands is an international auditing firm located in eleven offices in all major centres in Africa. Nolands employs almost 200 people and is focused on providing the best possible solutions for its clients. The company prides itself on being “not ordinary” and on its ability to integrate services and respond rapidly to clients’ needs.
Helen E. Ijewere is currently the Regional Chair MEA of the GGI Global Mobility Solutions Practice Group. She is a Director at Nolands Nigeria. Her areas of specialisation are Global Mobility Solutions, Tax, Corporate Governance, Risk, Ethics, Compliance and Fraud. She joined the firm in January 2016 from private practice. She has a JD from the University of North Carolina School of Law, Chapel Hill, NC, USA, and a BA from Trinity College, Washington, DC, USA. Contact Helen.