PERSONAL INCOME TAX
Personal Income Tax is tax that is levied on the income of individuals who are either in employment or are engaged in their own business. The Tax encompasses both PAYE and Direct Assessment.
Pay As You Earn (PAYE) is a provision under the Personal Income Tax Act, 2004 (as amended) and it is the taxation of income of individuals derived from employment. This income includes salaries, wages, bonuses, allowances and benefits in kind.
- DIRECT ASSESSMENT
Direct Assessment is an Income Tax which is imposed on self employed persons e.g. Directors, Accountants, Traders, Hair Dressers, Carpenters, Lawyers, Mechanics, Vulcanizes, artisans etc. Download full documentation on Direct Assessment processes here
These are taxes paid on contract awarded by establishments; It can also be defined as a government requirement for the payer of an item of income to withhold or deduct tax from the payment, and pay that tax to the government.
|SN||WHT ITEM||PERCENTAGE||DEPENDENT VARIABLE|
|1||WHT on Rent||10%||Value of Rent|
|2||WHT on Interest and Deposit||10%||Interest|
|3||WHT on Dividend||10%||Value of Dividend|
|4||WHT on Consultancy||5%||Value of Consultancy|
|5||WHT on Agency and Contract||5%||Value of Contract|
|6||WHT on Construction||5%||Value of Construction|
|7||WHT on Management Service||5%||Value of Service|
|8||WHT on Commission||5%||Value of Commission|
|9||WHT on Royalty||5%||Value of Royalty|
|10||WHT on Director’s Fee||10||Value of Fee|
STAMP DUTIES TAX
Stamp Duties Tax is backed by the Stamp Duties Act, Cap. 441 LFN, 1990. The tax provides for the levying of stamp duties on certain matters. The power to collect Stamp Duties by the State Tax Authority is enshrined in Section 4(2) where the State is given the power to collect the duties in respect of instruments executed between persons or individuals at such rates to be imposed or charged as may be agreed with the Federal Government.
- 3% of the consideration in the Document i.e amount stated in the document
- However, re-assessment may be done taking into consideration the current market value of the property. (make room for Best of Judgement BOJ)
CAPITAL GAINS TAX
Capital Gains Tax is backed by the Capital Gains Tax Act, Cap. 354, LFN 1990. It is the taxation of capital gains accruing on the disposal of assets.
- 10% of the gain from the sales of a fixed asset
LAND USE CHARGE
The Land Use Charge Tax is backed by The Land Use Charge Law (2012) which was introduced to consolidate all land based charges under one single charge for ease of administration and collection.
The Land Use Charge incorporates the Ground Rent which is provided for under the Land Use Act; Tenement Rate which is provided for under the Local Government Law; and the Property Tax which is provided for under the Land Use ChargeLaw.
- As determined by Ministry of Housing and Ministry of Land and Survey.
This Tax is backed by the “Hotels and Event Centers Occupancy and Restaurant Consumption Law (2011),” and is targeted at the hospitality industry to ensure that patrons of such outfits pay to Government a minimum tax of 5% of the total bill of the item or service consumed at these facilities.
- 3% on Contract sum.
POOLS BETTING/ LOTTERIES AND CASINOS
See attached Rules and Regulations guiding its operation in Kano State. (Hard Copy Provided)