Tax in Nigeria is based mainly on RESIDENCE, not nationality.

The Law Behind It

Under:

👉 Personal Income Tax Act

Your tax depends on:

✓ where you live
✓ where your income is sourced

PART 1: DIASPORANS — DO THEY FILE TAX IN NIGERIA?

Let Me Explain With a Simple Story

Mama Ngozi travels to the UK.

She now works and earns money there.

Question:

Will Nigeria tax her UK salary?

👉 NO (in most cases)

Why?

Because:

✓ she is NOT resident in Nigeria
✓ income is NOT earned in Nigeria

So When Will Diasporans Pay Tax in Nigeria?

ONLY If:

1. They earn income FROM Nigeria

Examples:

• rent from property in Nigeria
• salary from Nigerian company
• business income in Nigeria

OR

1. They are still considered tax resident in Nigeria

(This depends on number of days spent in Nigeria — usually 183 days rule)

So Final Answer (Diaspora)

If:

• you live abroad
• no Nigerian income

👉 You generally DO NOT file Nigerian PIT

If:

• you earn from Nigeria

👉 You MUST file tax in Nigeria

PART 2: NGX STOCK INVESTORS — DO YOU FILE TAX?

Let’s Be Very Clear

Trading on:

👉 Nigerian Exchange Group

does NOT automatically mean you must file tax.

Why?

Because in Nigeria:

1. Capital Gains on Shares

Currently:

👉 Capital gains on listed shares are largely exempt
(when traded on NGX, subject to conditions)

2. Dividends

Dividends are:

✓ already taxed at source (10% withholding tax)

What Does This Mean?

If You ONLY:

• buy and sell shares
• receive dividends

👉 Tax is already handled

So Do You Still File Annual Return?

YES — if:

• you are resident in Nigeria
• you have other income (salary, business, etc.)

NO (or minimal obligation) — if:

• your ONLY income is stock trading/dividends

Let Me Be Honest With You

Many people think:

“Once I invest, I must file tax”

Not always true.

Simple Breakdown

Diasporan

• No Nigerian income → No tax filing
• Nigerian income → File tax

NGX Investor

• Only dividends → tax already deducted
• active income + stocks → file return

Final Truth

Tax is not about:

• where you are from

It is about:

✓ where you earn
✓ where you live

Let Me Leave You With This

Whenever you’re confused about tax, ask:

• “Where is this income coming from?”

That one question…

Will guide you to the correct answer every time.

Rose Ejituru

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