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Nigeria: Living There - Tax Issues

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Living There

INDIVIDUAL TAXATION

Residents are taxed on their worldwide income.

INCOME TAX

The taxable income of individuals includes the following:

• Gains or profits from any trade, business, profession, or vocation
• Salaries, wages, fees, allowances and other benefits arising from employment

Taxable income is computed as total income from any source less allowable deductions. Income tax is levied at progressive rates.

Resident individuals are entitled to the following personal deductions:

• Personal allowance of NGN5,000 (US$34) plus 20% of earned income
• Child allowance of NGN2,500 (US$17) for each minor child or each child in full-time education or training; this allowance is applicable to a maximum of four children
• Dependent relative allowance of NGN2,000 (US$14) for a relative supported by the taxpayer
• The actual amount paid for provident fund and life assurance premiums on the life of the taxpayer or spouse
• Disabled employed person’s allowance for special equipment (or services of an attendant used in the course of employment) of NGN3,000 (US$20) or 20% of earned income, whichever is higher
• Alimony, maximum of NGN3,000 (US$20)

RENTAL INCOME
Resident individuals earning rental income from real property are liable to pay an advance tax payment amounting to 10% of the gross rent. This is not a final tax for residents and may be credited against the final tax assessment.

CAPITAL GAINS
Capital gains tax is levied at a rate of 10% on the gains realized from the disposal of real property. Property acquisition costs and incidental costs in transferring property ownership (i.e. stamp duty, professional costs, and advertising) are deductible from the market value of the property.

Residents are exempt from paying capital gains tax from the disposal of their only or main residential property.

Residents enjoy certain personal tax reliefs by deducting the following allowances from gross income:

PROPERTY TAX

Land Use Tax

This is a unification of ground rents, tenement rents and neighborhood improvement rates, is imposed on real property, which is assessed by the respective state governments. For Lagos the rates are:

Nigeria - more data and information

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