LIRS Personal Income Tax Return (Nigeria)

A LIRS Personal Income Tax Return in Nigeria reports the figures a taxpayer must declare so the correct liability can be assessed.

The legal basis for Personal Income Tax in Nigeria is the Personal Income Tax Act (PITA, Cap P8, Laws of the Federation of Nigeria 2004), as significantly amended by the Finance Acts of 2019, 2020, 2021, and 2023. PITA imposes personal income tax on the income of individuals, sole traders, and members of partnerships (including LLPs under CAMA 2020) resident in Nigeria. The tax is administered by the relevant State Internal Revenue Service — the Joint Tax Board (JTB), established under PITA Section 86, coordinates the administration of personal income tax across all 36 states and the FCT.

The current PIT rates in Nigeria are graduated on a progressive scale under the Finance Act 2023: first NGN 300,000 at 7%; next NGN 300,000 at 11%; next NGN 500,000 at 15%; next NGN 500,000 at 19%; next NGN 1,600,000 at 21%; and income above NGN 3,200,000 at 24%. Allowable deductions include the Consolidated Relief Allowance (CRA) of NGN 200,000 plus 20% of gross income (whichever is higher), and various personal reliefs for dependants, disability, and life assurance premiums under PITA Sections 33 to 35.

Self-employed individuals and business owners must file an annual return by 31 March of the following year under PITA Section 41. PAYE employees are generally covered by their employer's annual PAYE remittance but may also be required to file individual returns if they have income from other sources — rental income, investment income, directorship fees, or foreign-source income — under PITA Section 81. Non-compliance attracts penalties of NGN 50,000 for the first month and NGN 25,000 for each subsequent month of default under the Finance Act 2021 amendments.

The legal framework governing the LIRS Personal Income Tax Return (Nigeria) in Nigeria draws on several key statutes and regulatory bodies. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Parties executing a LIRS Personal Income Tax Return (Nigeria) in Nigeria should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Personal Income Tax Act (Cap. P8, LFN 2004) sets the foundational requirements.

A Personal Income Tax Return in Nigeria is required to be filed by all individuals with taxable income under PITA in the following circumstances.

A PIT Return is required by self-employed individuals — including sole traders, freelancers, consultants, artisans, traders, and professionals practising on their own account — who must file an annual return with the relevant State Internal Revenue Service by 31 March of the year following the year of assessment, under PITA Section 41.

A PIT Return is needed by individuals who earn income from multiple sources — such as employment income supplemented by rental income from residential property, dividend income from shares listed on the Nigerian Exchange Group (NGX), interest income from bank deposits, or income from digital platform gigs — where the total income may not be fully captured by their employer's PAYE system.

A PIT Return is required by directors of companies who receive director's fees or remuneration in addition to their salary, as director's fees are separately assessable under PITA and are subject to withholding tax at source under the Withholding Tax Regulations (now updated by the Finance Act 2023).

A PIT Return is needed by individuals who have disposed of chargeable assets during the year — such as shares, real estate, or business assets — and who may be liable to Capital Gains Tax (CGT) under the Capital Gains Tax Act (Cap C1, LFN 2004) at the current rate of 10%, which is assessed by the Federal Inland Revenue Service (FIRS) for CGT purposes.

A PIT Return is required when the LIRS, FCT-IRS, or relevant State Board of Internal Revenue issues an assessment notice to an individual taxpayer requiring them to file a return for a specified year of assessment, even if no previous return has been filed.

Parties in Nigeria should prepare a LIRS Personal Income Tax Return (Nigeria) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.

A Personal Income Tax Return in Nigeria must contain the following essential information for the LIRS or relevant State IRS to assess the tax liability.

Taxpayer Identification: Full legal name, Tax Identification Number (TIN) assigned by the Federal Inland Revenue Service (FIRS) through the Joint Tax Board (JTB), residential address, phone number, and email. The TIN is the primary identifier and is required for all tax transactions in Nigeria.

Year of Assessment: The tax year to which the return relates — Nigerian PIT uses a calendar year (1 January to 31 December) as the basis period for individuals under PITA.

Employment Income: Gross salary, wages, and allowances from each employer during the year, with the employer's name, address, and PAYE registration number. Supporting documentation includes the employee's P60 equivalent (annual PAYE statement) from the employer and payslips.

Business and Self-Employment Income: Net profit from sole trader or freelance activities, computed in accordance with generally accepted accounting principles and adjusted for non-deductible items under PITA Sections 20 to 32. Supporting accounts and schedules must be attached.

Other Income: Rental income (from residential or commercial property), investment income (dividends, interest), directorship fees, pension income from Pension Fund Administrators (PFAs) licensed by PenCom, and any foreign-source income subject to Nigerian PIT.

Allowable Deductions and Reliefs: The Consolidated Relief Allowance (CRA) under PITA Section 33; personal relief for dependants; life insurance premium deductions; National Housing Fund (NHF) contributions to the Federal Mortgage Bank of Nigeria (FMBN); and National Health Insurance Scheme (NHIS) contributions.

Tax Computation: The computed taxable income, the applicable progressive rate schedule under PITA (as amended by Finance Act 2023), the gross tax liability, PAYE tax already deducted at source, withholding tax credits, and the net tax payable or refundable.

Declaration and Signature: A signed declaration by the taxpayer (and their tax representative, if applicable) confirming the accuracy of the information under penalty of perjury under the FIRS Establishment Act (Cap F36, LFN 2007 as amended).

Additional compliance elements for a LIRS Personal Income Tax Return (Nigeria) used in Nigeria include: Under Nigerian law, the Companies and Allied Matters Act 2020 (CAMA) regulates corporate entities through the Corporate Affairs Commission (CAC). The Labour Act (Cap L1 LFN 2004) and the National Industrial Court of Nigeria (NICN) govern employment disputes. The Nigeria Data Protection Regulation (NDPR) 2019 and the Nigeria Data Protection Commission (NDPC) protect personal data. The Federal Inland Revenue Service (FIRS) administers tax obligations under the Companies Income Tax Act. The Federal High Court and state High Courts have jurisdiction over civil matters. Forms-legal.com provides this template as a starting point for Nigeria-compliant documentation.