Personal Income Tax is a direct tax on income, salary, allowance, wage, fee, bonuses, dividends or any benefit of an adult individual human being resident in Nigeria gotten in Nigeria or outside Nigeria or that of any person resident outside Nigeria but deriving income or profit from Nigeria.
Note that apart from individual persons, communities, families, executors and trustees are expected to pay personal income tax.
An Employee/worker/staff’s personal income tax is compulsorily withdrawn from the salary of such employee even before such employee is paid salary. This method is called the Pay As You Earn (PAYE).
The deducted personal income tax must be remitted to the relevant government tax agency before the 10th day of the following month. So the deduction of January must be remitted by the employer to government before the 10th of February.
Unlike employees, a self-employed person assess himself and pays his personal income tax to relevant government tax agency on a yearly basis and must pay within the first 90 days of the preceding year. So, personal income tax of January to December 2019 must be assessed and paid before 31st day of March 2020.
Also, an employer must file a return, a comprehensive list of all employees and their deducted personal income tax that were remitted by the employer to the relevant government tax agency for such agency to ensure there is no breach. The returns of any year must be filled before 31st day of January of the following year. So, returns of January to December 2019, must be filed before 31 January 2020.
A self-employed person is expected to file returns of income earned in the previous year by the next year before 31st day of March (ie, first 90 days of a new year) without any demand or notice for such. So, returns of January to December 2019 must be filed before 31st day of March 2020. There will be no return, where annual income is N30,000 or less.
My authorities are sections 1, 2, 3, 7, 41, 43, 81, 108 and 109 of the Personal Income Tax Act 1993.
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