You’re asking a subtle but important distinction under the Nigeria Tax Administration Act (NTAA). Let’s break it down carefully. 1️⃣ Personal Income Tax (PIT) Governed primarily by state governments through State Internal Revenue Services (SIRS). Applies to: Individuals earning salaries/wages in NigRead more
You’re asking a subtle but important distinction under the Nigeria Tax Administration Act (NTAA). Let’s break it down carefully.
1️⃣ Personal Income Tax (PIT)
Governed primarily by state governments through State Internal Revenue Services (SIRS).
Applies to:
Individuals earning salaries/wages in Nigeria
Sole proprietors (registered as enterprises)
Collected under PAYE (Pay-As-You-Earn) for employees.
✅ This is why, for PIT, the state collects directly, even though FIRS provides overarching regulations.
2️⃣ Company Income Tax (CIT)
CIT is different from PIT.
Applies to companies registered as separate legal entities with the Corporate Affairs Commission (CAC).
Governing law: Companies Income Tax Act (CITA).
Collector:
Federal Inland Revenue Service (FIRS) exclusively collects CIT.
CIT applies to:
Limited liability companies (Ltd)
PLCs
Any company incorporated under CAC laws
💡 Key point: State SIRS do not collect CIT, even if the company operates in their state. They may still handle state-level taxes like Withholding Tax (WHT) at source or levies, but CIT is federal.
3️⃣ Difference in scope
Tax Type
Collected By
Applies To
PIT
State SIRS
Individuals & Sole Proprietors
CIT
FIRS
Registered Companies (Ltd, Plc, etc.)
VAT
FIRS & sometimes SIRS
Goods & Services
WHT
Both (depending on type)
Individuals, companies
✅ Bottom line
If your business is a registered company (Ltd/PLC) → FIRS collects your Company Income Tax.
If your business is a sole proprietorship or individual → state collects PIT.
If you want, I can also explain why some companies end up paying both FIRS and SIRS taxes and how to avoid double taxation legally — it’s a common trap in Nigeria.
Under Nigeria Tax Administration Act, Who Collects Company Income Tax From Registered Limited Liability Companies in Nigeria?
You’re asking a subtle but important distinction under the Nigeria Tax Administration Act (NTAA). Let’s break it down carefully. 1️⃣ Personal Income Tax (PIT) Governed primarily by state governments through State Internal Revenue Services (SIRS). Applies to: Individuals earning salaries/wages in NigRead more
You’re asking a subtle but important distinction under the Nigeria Tax Administration Act (NTAA). Let’s break it down carefully.
1️⃣ Personal Income Tax (PIT)
Governed primarily by state governments through State Internal Revenue Services (SIRS).
Applies to:
Individuals earning salaries/wages in Nigeria
Sole proprietors (registered as enterprises)
Collected under PAYE (Pay-As-You-Earn) for employees.
✅ This is why, for PIT, the state collects directly, even though FIRS provides overarching regulations.
2️⃣ Company Income Tax (CIT)
CIT is different from PIT.
Applies to companies registered as separate legal entities with the Corporate Affairs Commission (CAC).
Governing law: Companies Income Tax Act (CITA).
Collector:
Federal Inland Revenue Service (FIRS) exclusively collects CIT.
CIT applies to:
Limited liability companies (Ltd)
PLCs
Any company incorporated under CAC laws
💡 Key point: State SIRS do not collect CIT, even if the company operates in their state. They may still handle state-level taxes like Withholding Tax (WHT) at source or levies, but CIT is federal.
3️⃣ Difference in scope
Tax Type
Collected By
Applies To
PIT
State SIRS
Individuals & Sole Proprietors
CIT
FIRS
Registered Companies (Ltd, Plc, etc.)
VAT
FIRS & sometimes SIRS
Goods & Services
WHT
Both (depending on type)
Individuals, companies
✅ Bottom line
If your business is a registered company (Ltd/PLC) → FIRS collects your Company Income Tax.
If your business is a sole proprietorship or individual → state collects PIT.
If you want, I can also explain why some companies end up paying both FIRS and SIRS taxes and how to avoid double taxation legally — it’s a common trap in Nigeria.
See less