NIGERIA LAW AND PRACTICE Contributed by: Chinyerugo Ugoji, Tiwalola Osazuwa, Rebecca Ebokpo, Jibrin Dasun, Peretimi Akinmodun, Onyinyechi Chima and Princess Otah, ǼLEX
• up to NGN300,000 – 7%; • NGN300,001–600,000 – 11%; • NGN600,001–1,100,000 – 15%; • NGN1,100,001–1,600,000 – 19%; • NGN1,600,001–3,200,000 – 21%; and • NGN3,200,001 and over – 24%.
contribution to the National Health Insurance Scheme (NHIS). These contributions are to be paid into the account of a designated health maintenance organisation (HMO), which is accredited by the NHIS. The HMOs are required to contract with healthcare providers to provide healthcare to employees insured with the HMO under the NHIS. • Group life insurance policy: an employer is required to maintain a group life insurance policy in favour of its employees for a mini - mum of three times the annual total emolu- ment of its employees. 5.2 Taxes Applicable to Businesses Companies Income Tax (CIT) CIT is imposed on the profits of any compa - ny accruing in, derived from, brought into or received in Nigeria in respect of a trade or busi - ness. Companies incorporated in Nigeria are liable to CIT on their worldwide income. A non-Nigerian company would be liable for CIT if it: • has a fixed base in Nigeria; • habitually operates a business in Nigeria through a dependent agent; • executes a turnkey contract in Nigeria; • provides technical, managerial, consultancy or professional services to a person resident in Nigeria, to the extent that the foreign com - pany has “significant economic presence” in Nigeria; • trades, or engages in business or activity, with another person controlled by it or who has a controlling interest in it and conditions are made or imposed between the company and that other person in their commercial or
Every employer is obliged to withhold and remit its employees’ personal income tax to the tax authority of the state(s) in which such employees are resident under the pay-as-you-earn (PAYE) scheme. Social Security Contributions The following social security contributions are required of employers and their employees. • Pension: an employer with 15 or more employees is required to contribute a mini - mum of 10% of the monthly emolument of each employee to the retirement savings account of each employee. Employees are required to contribute a minimum 8% of their monthly emoluments, to be deducted by their employers. • Nigeria Social Insurance Trust Fund (NSITF): employers are required to contribute 1% of the total monthly payroll to the NSITF for purposes of the Employee Compensation Scheme, which compensates employees (or their dependants) in the event of injury, dis - ability or death. • Industrial Training Fund (ITF): employers in industry or commerce that have 25 or more employees and do not operate within a free trade zone are required to contribute 1% of their annual payroll to the ITF for the purpose of providing industrial training to employees. • Health insurance: it is mandatory for all employees to have a functional health insur - ance package. Employers with a minimum of ten employees are required to register for
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