Welcome to the second edition of recent changes in the Nigeria Tax, The Nigerian Tax System has undergone significant changes in recent times, these changes are summarised as follows


The Federal Inland Revenue Service has deployed what it called e-filing service and e-tax pay solution under its Integrated Tax Administration System to operate a transparent and efficient tax system that optimises tax revenue collection and voluntary compliance.

The objective of these is to change the current manual system of filling tax returns through Federal Inland Revenue Service tax offices.

E-filing is an electronic self-service platform that enables taxpayers to file their tax returns and conduct other tax services online at their convenience irrespective of their locations once internet is available.

Benefit of the e-filing

  • It is tailored towards making voluntary tax compliance easy.
  • It is also helpful to the taxpayer in:
  • Making enquiries
  • Sending message through customer service centre in the dashboard
  • Applying for Tax Clearance Certificate online
  • Responding to audit queries online and uploading supporting documents.


Introduction of e-payment

e-tax Pay is an online self-service tax payment system whereby the taxpayers are given opportunity to pay their taxes through their banks’ online payment portal. It is an initiative put in place by Federal Inland Revenue Service in collaboration with Nigerian Interbank Settlement System (NIBSS) and approved collecting Banks, to assist taxpayers pay their taxes with maximum ease. Taxpayers can do it themselves using the electronic service channels provided by their bankers. (These service channels will include the banks internet banking, ATM and other mobile banking platforms.)

  • Taxes that can be paid using the e-tax pay channel?
  • You can use the e-tax Pay channel to pay only the taxes/levies collected by the Federal Inland Revenue Service. They include:
  • Petroleum Profit Tax
  • Education Tax
  • Companies Income Tax
  • VAT
  • Personal Income Tax/PAYE (Residents of FCT and non-Residents)
  • Withholding Tax
  • National Information Technology Levy
  • Capital Gains Tax
  • Pre-operation Levy
  • Late filing penalty.
  • Stamp duties



The quest of improving the revenue target given by the Federal Government has led Federal Inland Revenue Service since January 2015 to start the enforcement of section 77(1) of the Company Income Tax Act 2004. The section says ‘’Notwithstanding any other provision of this section, every company shall not later than three (3) months from the commencement of each year of assessment pay provisional tax of an amount equal to tax paid (Income tax and education tax) by such company in the immediately preceding year of assessment in one lump sum.




Section 20(2) and (3) of Personal Income Tax Acts (Amended Dec 2011) states as follows:

(2) Every employer shall be required to file a return with the relevant tax authority of all emoluments paid to its employees. not later than 31st January of every year in respect of all employees in its employment in the preceding year.



Section54. (1) of Company and Allied Matters Act 1990, Subject to sections 56 to 59 of this Act, every foreign company which before or after the commencement of this Act was incorporated outside Nigeria, and having the intention of carrying on business in Nigeria, shall take all steps necessary to obtain incorporation as a separate entity in Nigeria for that purpose, but until so incorporated, the foreign company shall not carry on business in Nigeria or exercise any of the powers of a registered company and shall not have a place of business or an address for service of documents or processes in Nigeria for any purpose other than the receipt of notices and other documents, as matters preliminary to incorporation under this Act.


TRANSFER PRICING – Highlights of the Nigeria TP Regulations

The TP Regulations were introduced in Nigeria with effect from 2nd August 2012 and are applicable to basis periods commencing after this date. The TP regulations are based on the following sections:

Section 17 of the Personal Income Tax Act, 2004.

Section 22 of the Companies Income Tax Act, 2004 (as amended by the Companies Income Tax (Amendment) Act 2007.

Section 15 of the Petroleum Profits Tax Act, 2004.

Persons covered

The Regulations apply to transactions between “Connected Taxable

persons” (CTPs) which is broadly defined in the regulations to include

  • Individuals
  • Permanent establishments created by head offices
  • Subsidiaries
  • Associates
  • Partnerships
  • Joint ventures and trusts

to the extent that they participate directly or indirectly in the management, control or capital of another; or both of which have common control, management or shareholders exists.

Documentation requirements

Taxpayers are to prepare documentation and analysis justifying pricing of their related party transactions within 21 days of a request from the Federal Inland Revenue Service. This would generally include details of related party transactions, pricing method, reasons for selection of TP method, information on comparable etc.

Annual declarations on related party transactions must be made on a standard form at the time of filing the annual tax returns including specific statements on whether or not documentation exists.

Transfer Pricing Policy is also required from each of the connected persons.



As a result of the fall in crude oil prices, the revenue accruing to the Nigeria Government has been reduced drastically. Taxation has therefore become a major focus for revenue generation. The Tax Authorities are expected to be more aggressive in enforcing those laws that were hitherto left in the statute books without any attempt to ensure compliance.


By Adebola Olubanjo

Abuja, Nigeria



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