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Nigeria

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About

Nigeria

Capital
Official languages
Population 
Currency

ISO 4217

Abuja

English

206,139,589 (as of July 2020)

Naira

NGN

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Economy

"Nigeria is the largest economy in Africa, with a GDP of $397.3 billion in 2019. It is also the most populous country in Africa, with a population of over 200 million people. The country has seen steady economic growth over the past decade, with an average annual growth rate of 2.5%. The primary drivers of this growth have been the oil and gas sector, which accounts for about 90% of the country’s exports, and the services sector, which accounts for about 60% of the country’s GDP. The country has also seen an increase in foreign direct investment, with a total of $2.3 billion in 2019.

Nigeria has a large informal economy, which accounts for about 60% of the country’s GDP. This informal sector is largely driven by small-scale businesses, such as street vendors, small-scale farmers, and artisans. The country also has a large agricultural sector, which accounts for about 40% of the country’s GDP. The agricultural sector is largely driven by small-scale farmers, who produce a variety of crops, including cassava, maize, yams, and rice.

The country has seen an increase in poverty levels over the past decade, with an estimated 70% of the population living below the poverty line. The government has implemented a number of initiatives to reduce poverty, including the National Social Investment Program, which provides cash transfers to the poorest households.

Overall, Nigeria has seen steady economic growth over the past decade, driven by the oil and gas sector, the services sector, and foreign direct investment. The country has also seen an increase in poverty levels, but the government has implemented a number of initiatives to reduce poverty."

Taxation

Taxation in Nigeria is governed by the Federal Inland Revenue Service (FIRS) for federal taxes and the various state revenue services for state taxes. The tax system in Nigeria includes various taxes, such as personal income tax, corporate income tax, value-added tax (VAT), withholding tax, and capital gains tax.


For personal income tax, residents of Nigeria are required to pay tax on their worldwide income, while non-residents are taxed only on their Nigerian-sourced income. The tax rates are progressive, ranging from 7% to 24% depending on the level of income. Employers are required to deduct and remit personal income tax on behalf of their employees.


For corporate income tax, the tax rate is 30% for resident companies and non-resident companies with a permanent establishment in Nigeria. Non-resident companies without a permanent establishment in Nigeria are subject to a final withholding tax of 10%. Companies are required to file their tax returns within six months of their accounting year-end.


Value-added tax (VAT) is a consumption tax that applies to most goods and services in Nigeria. The current rate of VAT is 7.5%, and businesses are required to register for VAT with the FIRS if their annual turnover exceeds ₦25 million.


Withholding tax is a tax deducted at source on certain payments such as rent, royalties, and professional fees. The rates of withholding tax range from 2.5% to 10% depending on the nature of the payment.


Capital gains tax is applicable on the disposal of chargeable assets, including shares, land, and buildings. The rate of capital gains tax is 10%.


The tax calendar for corporate taxpayers requires companies to file their annual tax returns within six months of their accounting year-end. Quarterly payment of estimated income tax is also required. Personal income tax is due annually on or before 31st of March, for the preceding year.


Tax payments are made through designated banks, and taxpayers are required to obtain a tax identification number (TIN) from the FIRS before making any tax payment.


In summary, the taxation system in Nigeria is complex and governed by various tax laws and regulations. Businesses and individuals are required to comply with the tax laws and file their tax returns and payments within the specified deadlines to avoid penalties and interest charges.

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