When you think about paying taxes in Nigeria, one thing you’ll encounter early is that it comes with a lot of bottlenecks, paperwork and trips to physical offices. That’s why we are writing about easy tax payment in Nigeria.
These reasons and more constitute why a lot of Nigerians who are eligible taxpayers (personal or business owners) don’t remit their taxes accordingly and consistently.
Paying your taxes has a lot of benefits for you, either as an individual or a business owner; having your tax receipts and other tax documents takes away the restriction of local and international exploits and business expansion.
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Let us look at the 5 most popular types of taxes paid in Nigeria and what they mean:
- Company Income Tax (CIT): This is one of the major types of taxes collected by the Federal Inland Revenue Service (FIRS) and other state tax agencies like the Lagos Inland Revenue Service (LIRS) and chargeable on all companies incorporated in Nigeria. However, there are a few sectors exempted and one is the agricultural sector. Read more here..
- Personal Income Tax (PIT): Personal income Taxes are levied on the income, wages and earnings of individuals. Earnings subject to income taxes can come from diverse sources, including wages, salaries, dividends, interest, royalties, rents, and product sales. It is a progressive tax and remitted to the State Inland Revenue Service of the jurisdiction in which the payer resides, irrespective of the institutions or bodies they work.
- Value Added Tax (VAT): The VAT system is invoice-based and paid at several points throughout goods or services production lines. Every seller in the production chain charges a VAT tax to the buyer. It is expected to file VAT monthly at the correspondence Tax Office of the taxpayer.
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- Withholding Tax (WHT): A withholding tax, is an income tax to be paid to the government by the payer of the income rather than by the recipient of the income. This type of tax is withheld or deducted from the income due to the recipient at source.
- PAYE (Pay As You Earn): Pay As You Earn refers either to a system of income tax withholding by employers. Employers pay this tax on behalf of their employees and it’s remitted alongside other statutory payments. The value of this tax is often calculated alongside the gross salary of the employee. This amount is deducted and remitted monthly on behalf of the employee.
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Tax Identification Number (TIN)
Tax Identification Number popularly called TIN is a unique number issued by the Federal Inland Revenue Service, the federal tax authority in Nigeria.
The primary purpose of the TIN is for identification of taxpayers in Nigeria, either as an individual or an organization.
Getting a TIN is easy, free and can be gotten from your mobile phone. Learn how here.
Easy Tax Payment in Nigeria with Taxpal
Do you desire to pay your taxes with ease, get your receipts and other documents with the speed of light, and also ensure that you are not overpaying your taxes. It only takes a few minutes.
- Create a Taxpal account here.
- Choose the type of taxes you want to pay (personal or business)
- Make payment and you will have access to your personalised dashboard
It gets even easier, fill this form and a Taxpal representative will reach you to help you set-up your account and start your tax payment journey seamlessly.
Learn more about business compliance and taxes here.
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