Taxation of Not-for-Profit Organisations (NPFOs) in Nigeria
- Companies Income Tax:
In Nigeria, NFPOs are exempted from paying Companies Income tax in accordance with Section 23 (1) of the Companies Income Tax Act (CITA) Cap C21, LFN 2004. However, NFPOs are expected to file tax returns even though they are exempted from Companies Income Tax.
- Value Added Tax
NFPOs are liable to Value Added Tax (VAT) on goods and services, except where the goods and services are VAT exempt or zero-rated. NPFOs are therefore obligated to charge VAT and remit to appropriate tax authority.
- Withholding Tax
NFPOs are also not exempted from obligations relating to withholding taxes deducted from vendor’s invoices. This should be deducted by the NPFOs and remitted monthly to the appropriate tax authority,
- Employee Tax (PAYE)
Not all NFPOs have volunteers. Thus employees of NFPOs receive remuneration from which pay-as-you-earn (PAYE) tax is deducted and remitted to the appropriate tax authority