Tax Compliance in Nigeria
Tax administration in Nigeria is handled by:
Federal Inland Revenue Service (FIRS) – handles federal taxes (company income tax, VAT, etc.).
State Internal Revenue Service (SIRS) – handles personal income tax (for sole proprietors and employees).
Taxes You May Need to Pay:
- Tax Identification Number (TIN)
Apply for a TIN (free) from FIRS.
Required for opening a corporate account and tax filing.
- Value Added Tax (VAT)
7.5% on goods and services supplied.
Businesses must register with FIRS and file monthly VAT returns.
- Company Income Tax (CIT)
30% for large companies.
20% for medium companies (₦25m – ₦100m turnover).
0% for small companies (less than ₦25m turnover).
- Personal Income Tax (PIT)
Paid by sole proprietors, partnerships, and employees.
Collected by State Internal Revenue Service.
- Other Possible Taxes
Withholding Tax (WHT)
Stamp Duties
Education Tax (for larger companies)
✅ Benefits of Formalization & Tax Compliance
Legal recognition & protection.
Access to loans, grants, and investors.
Eligibility for government contracts.
Builds customer trust.
Avoids fines, penalties, or closure by CAC/FIRS.
⚡ Quick Example:
If you run a catering business in Lagos:
You register your business name with CAC.
Apply for a TIN.
Collect VAT on each invoice you issue.
File VAT monthly with FIRS.
Pay personal or company income tax depending on your structure.
