Nigeria Tax Rates
Nigeria, Africa's largest economy by GDP, operates a progressive personal income tax system with rates up to 24%. The Federal Inland Revenue Service (FIRS) administers federal taxes, while state boards handle personal income tax for most individuals. Nigeria has a 30% corporate tax rate, 7.5% VAT, and a 10% capital gains tax, with special incentives for pioneer industries and free trade zones.
Top Income Tax Rate
24%
Corporate Tax Rate
30%
VAT / Sales Tax
7.5%
Capital Gains Tax
10%
Detailed Tax Information
Income Tax Brackets
Nigeria's personal income tax is progressive with six brackets ranging from 7% on the first ₦300,000 to 24% on income exceeding ₦3.2 million. Employees in the private sector are taxed under the Pay-As-You-Earn (PAYE) system through their state of residence. Federal civil servants are taxed by the FIRS. A consolidated relief allowance of ₦200,000 or 1% of gross income (whichever is higher) plus 20% of gross income is deductible. Non-residents are taxed only on Nigerian-sourced income.
| Income Range | Tax Rate |
|---|---|
| ₦0 – ₦300K | 7% |
| ₦300K – ₦600K | 11% |
| ₦600K – ₦1.1M | 15% |
| ₦1.1M – ₦1.6M | 19% |
| ₦1.6M – ₦3.2M | 21% |
| ₦3.2M+ | 24% |
Corporate Tax
Nigerian companies pay corporate income tax at 30% on profits. Small companies with turnover under ₦25 million are exempt (0% rate). Medium companies with turnover between ₦25 million and ₦100 million pay 20%. Companies also pay a 2% tertiary education tax on assessable profits. Pioneer industries can receive tax holidays of 3-5 years. Free trade zone enterprises enjoy tax exemptions on manufacturing activities.
Standard Rate
30%
Small Business Rate
0%
Capital Gains Tax
Capital gains tax is levied at a flat rate of 10% on gains from the disposal of chargeable assets. This applies to both individuals and companies. The tax applies to property, shares (with some exemptions for listed securities), and other capital assets. Gains from disposal of government securities are exempt. Rollover relief is available when proceeds are reinvested in similar assets within the stipulated time frame.
Rate
10%
VAT / Sales Tax
Nigeria's VAT is levied at 7.5% on the supply of goods and services (increased from 5% in February 2020). Basic food items, medical supplies, educational materials, and exports are zero-rated or exempt. Small businesses with turnover below ₦25 million are exempt from VAT registration. Non-resident suppliers providing digital services to Nigerian consumers must register and charge VAT.
Standard Rate
7.5%
Cryptocurrency Tax
Nigeria taxes gains from cryptocurrency disposal at the 10% capital gains tax rate. Income from crypto mining or trading as a business is subject to income tax at applicable rates. The Central Bank of Nigeria has restricted banks from facilitating crypto transactions, but the Securities and Exchange Commission regulates digital assets. Crypto-to-crypto transactions and exchanges for fiat currency are taxable events.
Tax Treaties
Nigeria has approximately 17 double taxation agreements in force. The treaty network is relatively small compared to other major economies but covers key trading partners. Treaties typically provide reduced withholding rates on dividends, interest, and royalties.
Treaty Network
17
Double taxation agreements
Major treaty partners:
Key Details
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+$9K
Tax in United States
$24K
24.4% effective
Tax in Nigeria
$15K
15% effective
You Save
38.4%
less tax annually
US Citizens: Important Note
US citizens are taxed on worldwide income regardless of residence. You'll still need to file US taxes, though the Foreign Earned Income Exclusion and Foreign Tax Credit may reduce your liability.
