- April 25, 2023
- Posted by: Manuels Effe
- Categories: Finance & accounting, Insight
As with any specialized field, the tax laws in Nigeria have their own unique set of vocabulary that may be confusing to individuals who are not familiar with the terminology. In this blog post, we will explore some of the most important tax-related vocabulary that you should be familiar with when navigating the tax system in Nigeria.
- Taxpayer Identification Number (TIN)
The Taxpayer Identification Number (TIN) is a unique identifier assigned to every individual and business that is registered with the tax authorities in Nigeria. The TIN is used to track tax payments and ensure compliance with tax laws.
- Value Added Tax (VAT)
Value Added Tax (VAT) is a tax that is levied on the value added to goods and services at each stage of production and distribution. In Nigeria, VAT is currently set at a rate of 7.5%.
- Withholding Tax (WHT)
Withholding Tax (WHT) is a tax that is deducted at the source of payment. In Nigeria, WHT is deducted from payments made to suppliers, contractors, and service providers. The WHT rate varies depending on the type of payment and the status of the payee.
- Capital Gains Tax (CGT)
Capital Gains Tax (CGT) is a tax that is levied on the profit made from the sale of assets such as property, stocks, and other investments. In Nigeria, the CGT rate is currently set at 10%.
- Personal Income Tax (PIT)
Personal Income Tax (PIT) is a tax that is levied on the income of individuals. In Nigeria, PIT is collected by the state governments and rates vary depending on the level of income.
- Company Income Tax (CIT)
Company Income Tax (CIT) is a tax that is levied on the profits made by companies and businesses operating in Nigeria. In Nigeria, CIT is currently set at a flat rate of 30%.
- Excise Duty
Excise Duty is a tax that is levied on specific goods and services such as tobacco, alcoholic beverages, and luxury items. In Nigeria, the Excise Duty rate varies depending on the type of product.
- Tax Clearance Certificate (TCC)
A Tax Clearance Certificate (TCC) is a document issued by the tax authorities in Nigeria to individuals and businesses that have met their tax obligations for a given period. The TCC is required for a variety of transactions including opening bank accounts, bidding for contracts, and obtaining visas.
In conclusion, understanding tax laws in Nigeria requires familiarizing oneself with the above-listed tax-related vocabulary. While this is not an exhaustive list, it covers some of the most important terms that you may encounter when dealing with taxes in Nigeria. By having a better understanding of these terms, you can navigate the tax system in Nigeria with more confidence and make informed decisions about your tax obligations.