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VAT in Nigeria
05/05/2025

VAT in Nigeria

THIS WEEK ON TAXSIN TAXSin tax is a tax that is imposed of specific goods that is harmful to individuals or society at l...
02/04/2025

THIS WEEK ON TAX

SIN TAX
Sin tax is a tax that is imposed of specific goods that is harmful to individuals or society at large.

Examples of goods that are harmful are alcohol, drugs, to***co, candies, sugar and soft drinks. Others are gambling and po*******hy.

TWO OBJECTIVES OF SIN TAX
The two objectives of sin tax are:-
1. To discourage people from the consumption. When tax is impose on harmful goods, their prices go up and it tends to discourage people from consumption of such goods.
2. To increase government revenue for health financing.

In the year 2022 Nigeria government introduced sin tax by introducing sugar tax and also raising tax on ci******es to 30%.

The objective of the government is to discourage people from consuming sugar drinks and ci******es and at the same time increase revenue for the government to fund the health sector.

Dr Kennedy Iwundu (FCTI, FCCA, PhD)

TAXATION OF NON-RESIDENT COMPANIES IN NIGERIANon-resident companies are foreign companies. They are companies that are i...
10/03/2025

TAXATION OF NON-RESIDENT COMPANIES IN NIGERIA
Non-resident companies are foreign companies. They are companies that are incorporated in other countries but do come to Nigeria to do business.
In Nigeria, non-resident companies are obligated to register for VAT, collect VAT in their invoice and pay VAT to FIRS. Also non-resident companies are to suffer 10% WHT on income they made in Nigeria. If such non-resident company is from a country that has Double Tax Treaty (DTT) with Nigeria, the non-resident company suffer 7.5% WHT on Income made from Nigeria.
Any local company doing business with a non-resident company is obligated to deduct 10% or 7.5% WHT on money payable to non-resident company. 10% or 7.5% WHT is final tax for non-resident companies in Nigeria.

Taxation of Forex Trading Companies/IndividualsCapital Gains Tax (CGT) will not apply on the margin/gain since Forex is ...
24/02/2025

Taxation of Forex Trading Companies/Individuals
Capital Gains Tax (CGT) will not apply on the margin/gain since Forex is the stock in trade for the company or individual. While Company Income Tax (CIT) and Education Tax (EDT) are applied on the profits for companies, Personal Income Tax (PIT) will apply on profit of individuals.
CIT rate depends on the threshold of margins/gains, which will be applied at 0%, 20% and 30% respectively
VAT
Vat is paid on margin/gains above 25 million. Although it has been a contentious issue because forex traders say they cannot collect VAT because they will never sell above CBN approved margin, while FIRS insists that forex trading is not in the VAT exemption list.
In Some countries, CGT on margin/gains is the final tax on Forex trading.
In Nigeria, CIT, EDT and other taxes will apply on profits of companies while PIT will apply for profit of individuals.
Also in Nigeria, CGT will only apply if a company disposes forex investment which is not her principal business activity. However, where there is realised exchange rate gains in the course of company’s transactions, such gains are taxable under CIT
It is expected that the finance act should address the Issue of VAT on margins/gains on Forex because CBN and FIRS are still at variance.
Foreign exchange losses realised are tax deductible
Reference:
Dr. Kennedy Iwundu
Chairman CITN, Abuja District

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No 23 Yaounde Street Zone 6 Wuse
Abuja

Opening Hours

Monday 08:00 - 17:30
Tuesday 08:00 - 17:30
Wednesday 08:00 - 17:30
Thursday 08:00 - 17:30
Friday 08:00 - 17:00

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