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Paying Taxes in

Nigeria - Lagos

Below is a detailed summary of the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as administrative burden in paying taxes and complying with postfiling procedures.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 190 economies. The most recent round of data collection was completed on June 1, 2016 covering for the Paying Taxes indicator calendar year 2015 (January 1, 2015 – December 31, 2015).

Compare Nigeria - Lagos to 189 other economies.

Tax or mandatory contribution Payments (number) Notes on Payments Time (hours) Statutory tax rate Tax base Total tax rate (% of profit) Notes on TTR
Corporate income tax 1 398 30% taxable profit 17.46
Social Security Contributions 12 396 10% gross salaries 11.28
Tertiary education trust fund contribution 0 jointly 2% taxable profit 2.41
Training Tax 1 1% gross salaries 1.13
Employee Compensation Contribution paid by the employer 12 1% gross salaries 1.13
Capital gains tax 1 10% capital gains 0.47
Tax on money market interest 0 withheld 10% interest income 0.26 not included
Land Use Charge 1 0.132% property value 0.20
Stamp duty on checks 1 5% 5/1000 of value of check 0.18
Road license 1 NGN 5,000 per vehicle fixed fee depending on type of vehicle 0.04
State business levy 1 NGN 5,000 fixed fee 0.02
Infrastructure Development Tax 1 NGN 100 per employee fixed fee 0.00 withheld
Value added tax (VAT) 12 162 5% value added 0.00 not included
Fuel tax 1 included in fuel price 0.00
Employee labor tax 0 jointly 8% 0.00 withheld
National Housing Fund 12 2.5% gross salaries 0.00 withheld
Advertising tax 1 various rates 0.00 small amount
Stamp duty on contracts 1 0.00 small amount
Totals: 59 956 34.3
  • Answer
    Profit tax (% of profit) 20.3
    Labor tax and contributions (% of profit) 13.5
    Other taxes (% of profit) 0.5
    Answer Score
    Postfiling index (0-100) 17.2
    VAT refunds 0.0
    Does VAT/GST exist? Yes
    Frequency of VAT/GST refund submission monthly
    Does a VAT/GST refund process exist per the case study? No
    Restrictions on VAT refund process Input tax on capital purchase is irrecoverable
    Likelihood of VAT audit N/A
    Time to comply with VAT refund (hours) N/A 0.0
    Time to obtain a VAT refund (weeks) N/A 0.0
    Corporate income tax audits 0.0
    Does corporate income tax exist? Yes
    Likelihood of corporate income tax audit Likely
    Time to comply with a corporate income tax audit (hours) 65.0 0.0
    Time to complete a corporate income tax audit (weeks) 10.0 68.8
    Administrative appeal process
    First level administrative appeal authority Tax Appeal Commissioners
    Is the appeal authority independent? Different auditor
    Are appeal guidelines accessible to the public? Yes
    Source of appeal guidelines online/in printed publication/in person at tax office
    Is there a legal time limit for the appeal authority to issue a decision on the tax appeal? No
    Legal time limit

Notes:

Name of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table.

The hours for VAT include all the VAT and sales taxes applicable.

The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.

The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax audit and time to complete a corporate income tax audit.

N/A = Not applicable.