NIGERIA Law and Practice Contributed by: Theophilus Emuwa, Jibrin Dasun, Perpetua Onyeukwu and Tubosiya Ibama, ǼLEX
friendly societies and registered co-operative soci - eties and trade unions, provided that such gains do not arise from the disposal of assets acquired in connection with any trade or business. Capital gains tax (CGT) is not payable where the pro - ceeds from the disposal of the shares in a Nigerian company are utilised to acquire shares in the same or other Nigerian companies in the year of the disposal of the shares. 2.8 Other Taxes on Transactions VAT is levied on the supply of all goods and services, with a few exceptions, at the rate of 7.5%, and is col - lected by the supplier and remitted to the tax authority. However, oil and gas companies – including oil service companies, ministries, departments and agencies of governments, deposit money banks, and select tel - ecommunications companies – must withhold the VAT on the invoices from their suppliers and remit it to the NRS. A non-resident company supplying taxable services to a resident is required to charge, collect and remit VAT to the NRS. Where the non-resident company fails to do so, the NRS will demand the VAT from the resident. An importer of goods purchased online from a non- resident supplier is required to provide proof of the registration of the non-resident supplier to the NRS in order to avoid paying VAT at the port. Pursuant to the NTA, all input VAT is now recoverable, provided that such supplies are consumed, utilised or supplied while making taxable supplies. Lagos State levies a 5% consumption tax on services by hotels, restau - rants and event centres. Stamp duty is paid on most instruments, including electronic instruments. The rates differ for various instruments and can be as high as 3% of the value of
Niger Delta, where most of Nigeria’s oil is pro - duced. • An oil and gas company is required to pay 3% of its annual operating expenditure for the preceding financial year to the Host Community Trust Fund established for the benefit of the community host - ing the company’s operations. • Public interest entities (PIEs) are required to pay an annual levy (FRCN levy) into a fund to be main - tained by the Financial Reporting Council of Nigeria (FRCN). PIEs include: (a) regulated entities; (b) public companies; (c) private companies that are holding companies of public or regulated entities; (d) companies with government concession/li - cences; (e) private companies in which government retains an interest; (f) companies engaged and paid by any tier of government for public works with an annual contract sum of over NGN1 billion; and (g) any company with an annual turnover of NGN30 billion. The annual levy for PIEs listed on any recognised exchange in Nigeria ranges from 0.002% to 0.10% of market capitalisation, capped at NGN25 million. For PIEs other than listed entities, the annual levy rang - es from 0.02% to 0.05% based on turnover. In June 2025, the Minister of Industry, Trade and Investment announced that the President formally approved the suspension of the implementation of the FRCN levy applicable to unlisted PIEs. The Minister further stated that the FRCN has been directed to impose an interim cap of NGN25 million on annual dues payable by such entities, aligning with the existing cap applicable to listed PIEs. The NTA imposes a Development levy of 4% on the assessable profits of companies (excluding small companies and non-resident companies). This levy consolidates and replaces the Tertiary Education Tax, the Nigeria Police Trust Fund levy, the National Infor - mation Technology Development Agency levy, and the National Agency for Science and Engineering Infra - structure levy.
the underlying transaction. 2.9 Other Notable Taxes The following taxes or levies are notable.
• An oil and gas company is required to pay 3% of its annual budget to the Niger Delta Development Commission for tackling ecological problems in the
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