Tax in Nigeria can be divided into corporate tax and personal income tax. The corporate tax is the tax imposed on companies and other organizations by the government and they are paid on annual basis. The personal income tax, on the other hand, is the tax imposed by the government on private individuals.
Corporate income tax is usually deducted by the company after they have removed their profit and the tax is them remitted to the government. This means the government actually taxes them based on the profit they make and not based on the total amount they have yielded during a particular financial year.
On the other hand, personal income tax is deducted from salaries of the workers by the government. Those of them that are not working under government establishment are required to pay their taxes by themselves and also show evidence of payment.
Tax deduction from individuals can be direct or indirect. Direct tax is the one you have to pay from your income or salary. Another name for the indirect form of tax is value-added tax. This is the tax you pay for any product you buy. This means tax is already added to the cost of these products and you are paying the tax each time you buy such a product.
Corporate tax
The Corporate Tax Rate in Nigeria is presently high and it is now at 30 percent. Corporate Tax Rate in Nigeria has an average of 30.00 percent when calculated within the period of ten years running from year 2006 until year 2016. The value has reached an all time high rate of 30.00 percent in 2007 and also reached a record low of 30.00 percent in 2007.
In Nigeria, the Corporate Income tax rate is a tax that is collected from various companies in Nigeria. the amount being collected is based on the net income that the companies are able to generate while they are carrying out their various business activities in Nigeria. The calculation is done normally during one business year.
The benchmark that is being used refers to the highest rate for Corporate Income. Revenues from the Corporate Tax Rate are very important source of income for the government of Nigeria, though they also generate income from several other sources.
Personal income tax rate
The Personal Income Tax Rate in Nigeria presently stands at 24 percent. Personal Income Tax Rate in Nigeria has an average value of 24 percent from the year 2011 to the year 2016. It reached an all time high of 24 percent in 2012 and also a record low rate of 24 percent in 2012
In Nigeria, the Personal Income Tax Rate is a tax collected from individuals and is imposed on different sources of income like labor, pensions, interest and dividends. The benchmark used in calculating the personal income tax rate of individuals refers to the Top Marginal Tax Rate for that particular individual.
Revenues from the Personal Income Tax Rate are an important source of income for the government of Nigeria.