Not tax advice. Computation tools only. Have a professional check your work before filing.
openaccountants
openaccountants/skills/ng-income-tax.md

Use this skill with your AI agent

View on GitHub

Paste this skill into your AI agent's context, or save the file to your project. Works with any AI agent that reads markdown.

ng-income-tax.md554 lines24.9 KB
v20Nigeria
Not yet verified by an accountantContact accountant
1---
2name: ng-income-tax
3description: >
4 Use this skill whenever asked about Nigerian personal income tax for self-employed individuals (sole proprietors / freelancers). Trigger on phrases like "Nigeria income tax", "PITA", "FIRS", "self-assessment Nigeria", "progressive tax Nigeria", "minimum tax Nigeria", "consolidated relief", "CRA Nigeria", "TIN Nigeria", "WHT Nigeria", "income tax Lagos", "income tax Abuja", "state IRS", or any question about computing or filing income tax for a self-employed person in Nigeria. This skill covers progressive rates (7-24%), minimum tax (1% of gross income), consolidated relief allowance, capital allowances, withholding tax credits, self-assessment filing, and FIRS/state IRS requirements. ALWAYS read this skill before touching any Nigerian income tax work.
5version: 2.0
6---
7 
8# Nigerian Personal Income Tax — Self-Employed / Sole Proprietor (PITA) v2.0
9 
10## Section 1 — Quick Reference
11 
12### Progressive Tax Rates (PITA, Sixth Schedule)
13 
14| Taxable Income (NGN) | Rate |
15|---|---|
16| First 300,000 | 7% |
17| Next 300,000 (300,001 -- 600,000) | 11% |
18| Next 500,000 (600,001 -- 1,100,000) | 15% |
19| Next 500,000 (1,100,001 -- 1,600,000) | 19% |
20| Next 1,600,000 (1,600,001 -- 3,200,000) | 21% |
21| Above 3,200,000 | 24% |
22 
23### Consolidated Relief Allowance (CRA)
24 
25CRA = max(NGN 200,000, 1% x Gross Income) + 20% x Gross Income
26 
27The CRA replaced the previous personal allowance / children's allowance system from 2020.
28 
29### Minimum Tax
30 
31| Rule | Detail |
32|---|---|
33| Rate | 1% of gross income |
34| When it applies | When computed tax (per progressive rates) is LESS than minimum tax |
35| Effect | Taxpayer pays the HIGHER of computed tax or minimum tax |
36 
37### Capital Allowances (PITA, Fifth Schedule)
38 
39| Asset | Initial Allowance | Annual Allowance |
40|---|---|---|
41| Building (industrial) | 15% | 10% |
42| Motor vehicles | 50% | 25% |
43| Plant and machinery | 50% | 25% |
44| Furniture and fittings | 25% | 20% |
45| Computer equipment | 50% | 25% |
46 
47### Computation Structure
48 
49| Step | Description |
50|---|---|
51| A | Gross income from business |
52| B | Less: Allowable business deductions |
53| C | Assessable income (A minus B) |
54| D | Add: Other income (investment, rental, etc.) |
55| E | Gross total income (C plus D) |
56| F | Less: Consolidated Relief Allowance |
57| G | Less: Other reliefs (pension, NHF, life insurance) |
58| H | Taxable income (E minus F minus G) |
59| I | Tax per progressive rate table |
60| J | Compare with minimum tax (1% of gross) |
61| K | Tax payable (higher of I and J) |
62| L | Less: WHT credits |
63| M | Tax due / (refund) |
64 
65### Other Reliefs (PITA, s 33)
66 
67| Relief | Amount / Rule |
68|---|---|
69| Pension contribution | Actual contribution to approved scheme (min 8% of basic + housing + transport) |
70| National Housing Fund | 2.5% of basic salary (voluntary for self-employed) |
71| Life insurance premium | Actual premium paid |
72| National Health Insurance | Actual premium paid |
73 
74### Conservative Defaults
75 
76| Situation | Default Assumption |
77|---|---|
78| Residency unknown | STOP — non-residents taxed differently |
79| State of residence unknown | STOP — determines filing authority |
80| CRA computed on net income | WRONG — CRA is on GROSS income |
81| Capital expenditure directly deducted | WRONG — use capital allowances |
82| WHT certificate missing | Do NOT credit without certificate |
83| Minimum tax not checked | ALWAYS compare computed tax vs 1% of gross |
84| Filing authority unclear | FIRS for FCT (Abuja); state IRS for all others |
85 
86### Red Flag Thresholds
87 
88| Flag | Threshold |
89|---|---|
90| Computed tax = 0 but minimum tax > 0 | Minimum tax applies |
91| No WHT certificates from clients | Cannot credit without certificates |
92| Expenses close to income (high ratio) | Minimum tax likely applies |
93| Multiple state operations | Verify correct filing authority |
94| Capital expenditure directly expensed | Must use capital allowance schedule |
95 
96---
97 
98## Section 2 — Required Inputs + Refusal Catalogue
99 
100### Required Inputs
101 
1021. **Residency status** — resident vs non-resident
1032. **State of residence** — determines FIRS (FCT) or state IRS
1043. **Gross income from self-employment** — total business receipts
1054. **Business expenses** — nature, amount, and documentation
1065. **Other income** — employment, investment, rental
1076. **Life insurance and pension contributions** — for relief computation
1087. **National Housing Fund contributions** — if applicable
1098. **TIN** — Tax Identification Number
1109. **WHT certificates** — from clients who withheld tax
11110. **Bank statements** — 12 months (calendar year)
11211. **Capital assets purchased** — for capital allowance computation
113 
114### Refusal Catalogue
115 
116| Code | Situation | Action |
117|---|---|---|
118| R-NG-1 | Non-resident earning Nigeria-source income | Stop — WHT as final tax (10% on professional services); different rules |
119| R-NG-2 | Residency unknown | Stop — different treatment |
120| R-NG-3 | State of residence unknown | Stop — determines filing authority |
121| R-NG-4 | Capital expenditure claimed as expense | Reject — must use capital allowance schedule |
122| R-NG-5 | Old personal allowance / children's allowance system | Stop — replaced by CRA from 2020 |
123| R-NG-6 | Petroleum profits tax | Escalate — separate regime |
124 
125---
126 
127## Section 3 — Transaction Pattern Library
128 
129### 3.1 Income Patterns
130 
131| # | Narration Pattern | Tax Line | Notes |
132|---|---|---|---|
133| I-01 | `TRANSFER FROM [client]` / `NIP CR [client]` | Gross income — PITA taxable | Standard NIP (NIBSS Instant Payment) transfer from client |
134| I-02 | `USSD CREDIT` / `*737 CREDIT` | Gross income — PITA taxable | USSD banking credit from client |
135| I-03 | `POS SETTLEMENT` / `CARD COLLECTION` | Gross income — gross-up | POS terminal settlement |
136| I-04 | `PAYSTACK PAYOUT` / `PAYSTACK SETTLEMENT` | Gross income — gross-up | Paystack (Nigerian payment processor) payout |
137| I-05 | `FLUTTERWAVE PAYOUT` / `FLUTTERWAVE SETTLEMENT` | Gross income — gross-up | Flutterwave settlement |
138| I-06 | `STRIPE PAYOUT NGN` | Gross income — gross-up or foreign | Stripe payout; classify by payer country |
139| I-07 | `PAYPAL TRANSFER` / `PAYPAL WITHDRAWAL` | Gross income — foreign source likely | PayPal; flag for FX conversion |
140| I-08 | `PAYONEER DEPOSIT` | Gross income — foreign source | Payoneer settlement |
141| I-09 | `OPAY RECEIVED` / `PALMPAY RECEIVED` | Gross income — PITA taxable | Mobile money / fintech receipt |
142| I-10 | `TAX REFUND FIRS` / `REFUND SIRS` | NOT income — tax refund | Refund from tax authority |
143| I-11 | `INTEREST EARNED` / `SAVINGS INTEREST` | Investment income | Add to gross total income |
144| I-12 | `RENTAL INCOME` / `RENT RECEIVED` | Rental income | Add to gross total income |
145| I-13 | `WHT DEDUCTED` (annotation on payment) | WHT credit — not income reduction | Credit against final tax; require certificate |
146 
147### 3.2 Expense Patterns
148 
149| # | Narration Pattern | Tax Line | Notes |
150|---|---|---|---|
151| E-01 | `OFFICE RENT` / `RENT PAYMENT [landlord]` | Rent — fully deductible | Require receipt/invoice |
152| E-02 | `EKEDC` / `IKEDC` / `AEDC` / `BEDC` / `PHED` / `KAEDCO` | Electricity — deductible (business proportion) | Distribution company payment |
153| E-03 | `MTN` / `AIRTEL` / `GLO` / `9MOBILE` | Phone/internet — deductible (business %) | Telecom provider |
154| E-04 | `SPECTRANET` / `SMILE` / `IPNX` / `SWIFT NETWORK` | Internet — deductible (business %) | ISP provider |
155| E-05 | `ADOBE` / `MICROSOFT 365` / `GOOGLE WORKSPACE` | Software — fully deductible | Professional tools |
156| E-06 | `ACCOUNTANT` / `AUDIT FEE` / `TAX CONSULTANT` | Professional fees — fully deductible | |
157| E-07 | `ARIK AIR` / `AIR PEACE` / `DANA AIR` / `IBOM AIR` | Air travel — deductible (business purpose) | Document purpose |
158| E-08 | `HOTEL` / `BOOKING.COM` / `AIRBNB` | Accommodation — deductible (business travel) | Business purpose |
159| E-09 | `PENSION CONTRIBUTION` / `RSA [fund name]` | Pension — relief deduction | Approved pension scheme contribution |
160| E-10 | `NHF` / `NATIONAL HOUSING FUND` | NHF — relief deduction | If applicable |
161| E-11 | `LIFE INSURANCE` / `PREMIUM PAYMENT` | Life insurance — relief deduction | Own life insurance |
162| E-12 | `NHIS` / `HEALTH INSURANCE` | Health insurance — relief deduction | National/private health |
163| E-13 | `TAX PAYMENT FIRS` / `SIRS PAYMENT` | Tax payment — NOT deductible | Payment of tax liability |
164| E-14 | `FUEL` / `PETROL` / `DIESEL` / `TOTAL` / `OANDO` / `CONOIL` | Fuel — deductible (business proportion) | Document business use |
165| E-15 | `OFFICE SUPPLIES` / `STATIONERY` | Supplies — fully deductible | |
166| E-16 | `MARKETING` / `GOOGLE ADS` / `META ADS` / `ADVERTISING` | Marketing — fully deductible | |
167| E-17 | `STAFF SALARY` / `PAYROLL` | Staff costs — fully deductible | Include PAYE obligations for staff |
168| E-18 | `TRAINING` / `COURSE` / `CERTIFICATION` | Training — fully deductible | Professional development |
169| E-19 | `GENERATOR FUEL` / `DIESEL GEN` | Generator fuel — deductible (business %) | Common in Nigeria due to power supply |
170 
171### 3.3 Nigerian Bank Fees (Deductible)
172 
173| Pattern | Treatment | Notes |
174|---|---|---|
175| GTBANK, GUARANTY TRUST | Deductible for business account fees | Now GTCo |
176| ACCESS BANK | Deductible for business account fees | Merged with Diamond Bank |
177| ZENITH BANK | Deductible for business account fees | |
178| UBA, UNITED BANK FOR AFRICA | Deductible for business account fees | |
179| FIRST BANK, FBN | Deductible for business account fees | |
180| STANBIC IBTC | Deductible for business account fees | |
181| FCMB, FIRST CITY MONUMENT | Deductible for business account fees | |
182| FIDELITY BANK | Deductible for business account fees | |
183| STERLING BANK | Deductible for business account fees | |
184| WEMA BANK / ALAT | Deductible for business account fees | |
185| KUDA BANK, OPAY, PALMPAY, MONIEPOINT | Deductible for business account fees | Fintech/digital banks |
186| ACCOUNT MAINTENANCE FEE, COT | Deductible | Commission on turnover / maintenance |
187| SMS ALERT FEE, NOTIFICATION FEE | Deductible | Banking notification charges |
188| TRANSFER FEE, NIP FEE | Deductible | Inter-bank transfer fees |
189| STAMP DUTY | EXCLUDE | Government levy on transactions |
190 
191### 3.4 Government and Statutory (Exclude)
192 
193| Pattern | Treatment | Notes |
194|---|---|---|
195| FIRS, FEDERAL INLAND REVENUE | EXCLUDE | Federal tax authority payment |
196| LIRS, LAGOS STATE IRS | EXCLUDE | State tax authority |
197| CAC, CORPORATE AFFAIRS COMMISSION | Deductible | Business registration fee |
198| STAMP DUTY CHARGE | EXCLUDE | Government levy |
199 
200### 3.5 Internal Transfers and Exclusions
201 
202| Pattern | Treatment | Notes |
203|---|---|---|
204| OWN ACCOUNT TRANSFER, SELF TRANSFER | EXCLUDE | Internal movement |
205| ATM WITHDRAWAL | TIER 2 — ask | Default exclude; determine purpose |
206| LOAN DISBURSEMENT | EXCLUDE | Loan proceeds, not income |
207| LOAN REPAYMENT | EXCLUDE | Loan principal, out of scope |
208 
209---
210 
211## Section 4 — Worked Examples
212 
213### Example 1 — GTBank (Lagos, IT Consultant)
214 
215**Bank:** GTBank (Guaranty Trust) statement
216**Client:** Chidi Okafor, IT consultant, Lagos
217 
218```
219Date;Description;Debit;Credit;Balance
22005/01/2025;NIP CR FROM TECH CORP LTD;;2,500,000;
22115/01/2025;ACCOUNT MAINTENANCE FEE;1,500;;
22210/02/2025;NIP CR FROM STARTUP DIGITAL;;1,800,000;
22328/02/2025;PENSION RSA CONTRIBUTION;120,000;;
22415/03/2025;PAYSTACK SETTLEMENT;;980,000;
22501/04/2025;MTN AIRTIME/DATA;25,000;;
22620/04/2025;NIP CR FROM GAMMA SOLUTIONS;;3,200,000;
22710/07/2025;ACCOUNTANT FEES;150,000;;
22810/10/2025;AIR PEACE LAGOS-ABUJA;85,000;;
22915/11/2025;WHT DEDUCTED BY TECH CORP;250,000;;
230```
231 
232**Step 1 — Income**
233 
234Annualised gross: NGN 8,000,000. WHT deducted by PJ clients: NGN 500,000.
235 
236**Step 2 — Expenses**
237 
238Accounting: NGN 150,000; travel: NGN 85,000; telecom: NGN 300,000; software: NGN 240,000; marketing: NGN 180,000; office rent: NGN 1,200,000; generator fuel: NGN 360,000; other: NGN 485,000. Total: NGN 3,000,000.
239 
240**Step 3 — Computation**
241 
242```
243Gross income: NGN 8,000,000
244Less expenses: NGN 3,000,000
245Assessable income: NGN 5,000,000
246Add other income: NGN 0
247Gross total income: NGN 8,000,000 (for CRA calculation)
248 
249CRA: max(200,000, 80,000) + 20% x 8,000,000 = 200,000 + 1,600,000 = NGN 1,800,000
250Pension relief: NGN 120,000
251 
252Taxable income: 8,000,000 - 3,000,000 - 1,800,000 - 120,000 = NGN 3,080,000
253 
254Tax:
255 300,000 x 7% = 21,000
256 300,000 x 11% = 33,000
257 500,000 x 15% = 75,000
258 500,000 x 19% = 95,000
2591,480,000 x 21% = 310,800
260Total: NGN 534,800
261 
262Minimum tax: 1% x 8,000,000 = NGN 80,000
263Computed tax > minimum → pay NGN 534,800
264 
265Less WHT credit: NGN 500,000
266Tax due: NGN 34,800
267```
268 
269### Example 2 — Access Bank (Abuja, Consultant — WHT Heavy)
270 
271**Bank:** Access Bank
272**Client:** Amina Bello, management consultant, Abuja (FCT — file with FIRS)
273 
274Gross: NGN 12,000,000. All from corporate clients with 10% WHT.
275WHT suffered: NGN 1,200,000.
276After CRA and expenses: tax per rates = NGN 950,000.
277Less WHT: NGN 1,200,000.
278Result: **refund of NGN 250,000** (WHT > tax). File with FIRS for refund.
279 
280### Example 3 — Zenith Bank (Port Harcourt, Physician)
281 
282**Bank:** Zenith Bank
283**Client:** Dr. Emeka Nwosu, physician, Port Harcourt, Rivers State
284 
285Gross: NGN 20,000,000 (hospital fees + private patients).
286Expenses: NGN 5,000,000.
287CRA: 200,000 + 4,000,000 = NGN 4,200,000.
288Pension: NGN 800,000.
289Taxable: 20,000,000 - 5,000,000 - 4,200,000 - 800,000 = NGN 10,000,000.
290 
291Tax: 21,000 + 33,000 + 75,000 + 95,000 + 336,000 + (10,000,000 - 3,200,000) x 24% = 560,000 + 1,632,000 = **NGN 2,192,000**
292 
293File with Rivers State IRS (not FIRS).
294 
295### Example 4 — Kuda Bank (Lagos, Freelance Designer — Low Income)
296 
297**Bank:** Kuda Bank (digital)
298**Client:** Ngozi Eze, freelance designer, Lagos
299 
300Gross: NGN 600,000. Expenses: NGN 100,000.
301CRA: 200,000 + 120,000 = NGN 320,000.
302Taxable: 600,000 - 100,000 - 320,000 = NGN 180,000.
303Tax: 7% x 180,000 = NGN 12,600.
304Minimum tax: 1% x 600,000 = NGN 6,000.
305Pay NGN 12,600 (higher).
306 
307### Example 5 — UBA (Lagos, Minimum Tax Scenario)
308 
309**Bank:** UBA
310**Client:** Tunde Adeyemi, consultant, Lagos
311 
312Gross: NGN 10,000,000. Expenses: NGN 9,000,000.
313CRA: 200,000 + 2,000,000 = NGN 2,200,000. Pension: NGN 500,000.
314Taxable: 10,000,000 - 9,000,000 - 2,200,000 - 500,000 = max(0, -1,700,000) = NGN 0.
315Computed tax: NGN 0.
316Minimum tax: 1% x 10,000,000 = **NGN 100,000**.
317Tax payable: NGN 100,000 (minimum tax applies).
318 
319### Example 6 — First Bank (Kano, Multiple Income Sources)
320 
321**Bank:** First Bank
322**Client:** Ibrahim Musa, accountant, Kano, also earns rental income
323 
324Self-employment: NGN 6,000,000. Rental income: NGN 2,400,000.
325Total gross: NGN 8,400,000.
326CRA on total gross: 200,000 + 1,680,000 = NGN 1,880,000.
327All income aggregates. Apply expenses per source. Progressive rates on combined taxable income.
328File with Kano State IRS.
329 
330---
331 
332## Section 5 — Tier 1 Rules (Apply Directly)
333 
334**T1-NG-1 — CRA is computed on GROSS income, not net**
335The Consolidated Relief Allowance formula uses gross total income (before expenses), not assessable or taxable income. This is a common error. Always apply CRA to gross.
336 
337**T1-NG-2 — Minimum tax is a floor**
338Always compare computed tax per progressive rates with 1% of gross income. The taxpayer pays whichever is HIGHER. Minimum tax cannot be avoided by high expenses.
339 
340**T1-NG-3 — Capital expenditure must use capital allowances**
341Never deduct capital expenditure directly as a business expense. Use the Fifth Schedule rates (initial allowance in year of first use, annual allowance thereafter).
342 
343**T1-NG-4 — WHT is a credit, not income reduction**
344Withholding tax (10% on professional fees, 5% on contracts) deducted by clients is a credit against final tax. It does not reduce gross income. Must have WHT certificate to claim credit.
345 
346**T1-NG-5 — Filing authority depends on state of residence**
347FCT (Abuja) residents file with FIRS. All other states file with the State Internal Revenue Service (SIRS). This is not optional.
348 
349**T1-NG-6 — Old personal allowance system is abolished**
350The pre-2020 system of personal allowance + children's allowance + dependent relative allowance was replaced by CRA. Never apply the old deductions.
351 
352---
353 
354## Section 6 — Tier 2 Catalogue (Reviewer Judgement Required)
355 
356| Code | Situation | Escalation Reason | Suggested Treatment |
357|---|---|---|---|
358| T2-NG-1 | Mixed-use vehicle | Business proportion must be documented | Flag — reviewer determines reasonable business-use % |
359| T2-NG-2 | Home office expenses | Proportional deduction for dedicated space | Flag — document proportion and exclusivity |
360| T2-NG-3 | Capital allowance computation for complex assets | Initial vs annual allowance; residual value tracking | Flag — verify asset register and allowance schedule |
361| T2-NG-4 | Multiple state operations | Dual filing obligation possible | Flag — verify correct filing authority for each income source |
362| T2-NG-5 | Foreign income for Nigerian resident | Worldwide income taxable; treaty credits may apply | Escalate — treaty analysis required |
363| T2-NG-6 | Voluntary NHF / NHIS contributions | Relief amounts depend on actual contribution vs statutory basis | Verify contribution receipts and applicable relief limits |
364 
365---
366 
367## Section 7 — Excel Working Paper Template
368 
369```
370NIGERIAN PITA WORKING PAPER (SELF-EMPLOYED / SOLE PROPRIETOR)
371Taxpayer: _______________ TIN: _______________ FY: 2025 (Calendar Year)
372State: _______________ Filing Authority: [ ] FIRS (FCT) [ ] State IRS
373 
374SECTION A — GROSS INCOME
375 NGN
376Business receipts: ___________
377Platform payouts (grossed up): ___________
378Other business income: ___________
379TOTAL BUSINESS GROSS ___________
380 
381SECTION B — ALLOWABLE BUSINESS DEDUCTIONS
382Office rent: ___________
383Utilities (business %): ___________
384Telecom (business %): ___________
385Software: ___________
386Professional fees: ___________
387Travel (business purpose): ___________
388Marketing: ___________
389Staff salaries: ___________
390Office supplies: ___________
391Generator fuel (business %): ___________
392Capital allowances: ___________
393Other deductible: ___________
394TOTAL DEDUCTIONS ___________
395 
396SECTION C — ASSESSABLE INCOME
397Gross business - deductions ___________
398 
399SECTION D — OTHER INCOME
400Investment income: ___________
401Rental income: ___________
402Employment income: ___________
403GROSS TOTAL INCOME ___________
404 
405SECTION E — RELIEFS
406CRA: max(200,000, 1% x Gross) + 20% x Gross ___________
407Pension contribution: ___________
408NHF: ___________
409Life insurance: ___________
410NHIS: ___________
411TOTAL RELIEFS ___________
412 
413SECTION F — TAXABLE INCOME
414Gross total - deductions - reliefs ___________
415 
416SECTION G — TAX COMPUTATION
417Tax per progressive rates: ___________
418Minimum tax (1% x gross): ___________
419TAX PAYABLE (higher): ___________
420 
421SECTION H — CREDITS
422WHT suffered (with certificates): (___________)
423TAX DUE / (REFUND) ___________
424 
425SECTION I — REVIEWER FLAGS
426[ ] Residency confirmed (resident)?
427[ ] Filing authority confirmed (FIRS or state IRS)?
428[ ] CRA computed on GROSS income (not net)?
429[ ] Minimum tax compared with computed tax?
430[ ] Capital expenditure using capital allowances (not direct deduction)?
431[ ] WHT certificates collected for all credits?
432[ ] Old personal allowance system NOT applied?
433[ ] Generator/fuel expenses documented for business proportion?
434[ ] Multiple income sources properly aggregated?
435```
436 
437---
438 
439## Section 8 — Bank Statement Reading Guide
440 
441### GTBank (Guaranty Trust / GTCo)
442- Export: CSV/PDF from GTBank Internet Banking / GTWorld app
443- Columns: `Date;Description;Debit;Credit;Balance`
444- Amount format: comma thousands, period decimal (e.g., `2,500,000.00`)
445- Date: DD/MM/YYYY or DD-MMM-YYYY
446- Credits: `NIP CR FROM [sender]`, `MOBILE TRANSFER FROM [sender]`
447 
448### Access Bank
449- Export: CSV/Excel from Access More app / Internet Banking
450- Columns: `Date;Narration;Debit;Credit;Balance`
451- Credits: `NIP CREDIT FROM [sender]`, `TRANSFER FROM [sender]`
452 
453### Zenith Bank
454- Export: CSV from Zenith Internet Banking / ZMobile
455- Columns: `Trans Date;Value Date;Description;Debit;Credit;Balance`
456- Credits: `NIP CR [sender]`, `INWARD TRF FROM [sender]`
457 
458### UBA (United Bank for Africa)
459- Export: CSV/PDF from UBA Internet Banking / UBA Mobile
460- Standard Nigerian bank format
461 
462### First Bank of Nigeria (FBN)
463- Export: CSV from FirstBank Online / FirstMobile
464- Columns: `Date;Description;Debit;Credit;Balance`
465 
466### Stanbic IBTC
467- Export: CSV from Stanbic IBTC Internet Banking
468- Standard format
469 
470### Kuda Bank / OPay / PalmPay / Moniepoint (Digital)
471- Export: CSV/PDF from app
472- Simple format; credit/debit columns or single column
473- Narrations: `Transfer from [name]`, `Received from [name]`
474- OPay: `OPay Transfer from [name]`
475- PalmPay: `PalmPay Transfer from [name]`
476- Moniepoint: `Moniepoint Transfer from [name]`
477 
478### Paystack / Flutterwave Settlements
479- Appear in primary bank statement as `PAYSTACK SETTLEMENT` or `FLUTTERWAVE PAYOUT`
480- Gross-up required — platform deducts fees before settlement
481- Cross-reference with Paystack/Flutterwave merchant dashboard for gross amounts
482 
483### Key Nigerian Banking Notes
484- All amounts in NGN (Nigerian naira); comma thousands, period decimal
485- NIP (NIBSS Instant Payment) is the standard inter-bank transfer system
486- USSD banking (*737 for GTBank, *901 for Access, *966 for Zenith, etc.) common for mobile transfers
487- POS (Point of Sale) settlements may be delayed 1-3 days
488- Stamp duty charges (NGN 50 on transactions above NGN 10,000) are not deductible business expenses
489- Multiple accounts across banks is common — consolidate all statements
490 
491---
492 
493## Section 9 — Onboarding Fallback
494 
495**Filing authority:**
496> "Nigerian personal income tax is administered by the Federal Inland Revenue Service (FIRS) for residents of the Federal Capital Territory (Abuja) and by the State Internal Revenue Service (SIRS) for residents of all other states. Where do you reside? This determines where you file your self-assessment return."
497 
498**WHT certificates:**
499> "If your clients deducted withholding tax (10% on professional fees, 5% on contracts) from your payments, you need the WHT certificates (credit notes) to claim these as credits against your annual tax. Contact each client to obtain their WHT certificates. Without them, the credit cannot be claimed."
500 
501**CRA explanation:**
502> "Under the Consolidated Relief Allowance (introduced by Finance Act 2020), you receive an automatic deduction of the higher of NGN 200,000 or 1% of your gross income, plus an additional 20% of your gross income. This replaces the old personal allowance, children's allowance, and dependent relative allowance. No documentation is needed for CRA — it is computed automatically."
503 
504**Minimum tax:**
505> "Even if your computed tax per the progressive rates is very low or zero (due to high expenses), you are still required to pay a minimum tax of 1% of your gross income. The minimum tax acts as a floor — you pay whichever is higher between computed tax and minimum tax."
506 
507---
508 
509## Section 10 — Reference Material
510 
511### Key Legislation
512- **Personal Income Tax Act (PITA)** — Cap P8 LFN 2004, as amended by Finance Act 2020, 2021, 2023
513- **FIRS Establishment Act** — Federal Inland Revenue Service
514- **Pension Reform Act 2014** — pension contribution requirements
515- **Finance Act 2020** — introduced CRA and simplified minimum tax
516 
517### Filing Calendar
518 
519| Deadline | Event |
520|---|---|
521| 31 March | Self-assessment return (PITA s 41-44) |
522| 31 March | Payment of tax due |
523| Monthly | WHT remittance (if agente de retención) |
524 
525### Penalties
526 
527| Offence | Penalty |
528|---|---|
529| Late filing | NGN 50,000 first month + NGN 25,000/subsequent month |
530| Late payment | 10% of tax due + interest at CBN MPR + spread |
531| Failure to keep records | NGN 50,000 fine |
532| Incorrect return (without fraud) | Twice the difference |
533| Tax evasion | NGN 20,000 fine or 3 years imprisonment or both |
534 
535### Record Keeping
536- Minimum retention: 6 years
537- Business records, invoices, receipts, bank statements, contracts
538- WHT certificates: retain permanently for audit
539 
540### Useful References
541- FIRS: www.firs.gov.ng
542- TaxPro Max: taxpromax.firs.gov.ng
543- State IRS portals: vary by state (LIRS: lirs.gov.ng, etc.)
544- Joint Tax Board (JTB): www.jtb.gov.ng
545 
546 
547---
548 
549## Disclaimer
550 
551This skill and its outputs are provided for informational and computational purposes only and do not constitute tax, legal, or financial advice. Open Accountants and its contributors accept no liability for any errors, omissions, or outcomes arising from the use of this skill. All outputs must be reviewed and signed off by a qualified professional (such as a CPA, EA, tax attorney, or equivalent licensed practitioner in your jurisdiction) before filing or acting upon.
552 
553The most up-to-date, verified version of this skill is maintained at [openaccountants.com](https://openaccountants.com). Log in to access the latest version, request a professional review from a licensed accountant, and track updates as tax law changes.
554 

Run this skill, then get an accountant to check it

After running the full skill pack in your AI agent, sign up and upload your worksheet. We'll connect you with a trusted accountant in our network who can review your numbers before you file.

Sign up to submit a review

Quality

Q3: AI-drafted

AI-generated with structure and citations. Not independently verified.

Needs deep research against tax authority websites to reach Q2.

Accountant Review

Not yet reviewed
0/40

About

Use this skill whenever asked about Nigerian personal income tax for self-employed individuals (sole proprietors / freelancers). Trigger on phrases like "Nigeria income tax", "PITA", "FIRS", "self-assessment Nigeria", "progressive tax Nigeria", "minimum tax Nigeria", "consolidated relief", "CRA Nigeria", "TIN Nigeria", "WHT Nigeria", "income tax Lagos", "income tax Abuja", "state IRS", or any question about computing or filing income tax for a self-employed person in Nigeria. This skill covers progressive rates (7-24%), minimum tax (1% of gross income), consolidated relief allowance, capital allowances, withholding tax credits, self-assessment filing, and FIRS/state IRS requirements. ALWAYS read this skill before touching any Nigerian income tax work.

NGty-2025

Use this skill

This skill is open source and free to use in any AI agent. Copy it, download it, or clone the repo. If you find an error, flag it — a licensed accountant will review.

2 of 3 in the NG workflow: