Are Incorporated Trustees and Churches Required to File Tax Returns?

An incorporated trustee such as a church in Nigeria is generally treated as a non-profit / not-for-profit organization, but that does not mean it is completely exempt from tax compliance.
Under the Nigerian tax system, churches registered with the Corporate Affairs Commission as Incorporated Trustees are usually exempt from Companies Income Tax (CIT) on income used strictly for their religious and charitable objectives. However, they still have filing and compliance obligations with the Federal Inland Revenue Service and sometimes the State Internal Revenue Service.
Here is the practical breakdown:
1. Register for Tax Identification Number (TIN)
Even though the church is nonprofit, it should still obtain a TIN from:
Federal Inland Revenue Service
Or via CAC post-incorporation integration
You’ll typically need:
CAC certificate
Constitution/trust deed
Registered address
Trustee details
2. File Annual Returns With FIRS
Many churches misunderstand “tax exempt” to mean “no filing required.”
In reality:
The church may be exempt from paying CIT,
BUT it still needs to file annual tax returns/compliance documents.
Usually this involves:
Audited financial statements
Statement of affairs/income & expenditure
Tax exemption application or confirmation
Annual self-assessment filings
Failure to file can still attract penalties even where no tax is due.
3. PAYE Obligations (Very Important)
If the church has:
Pastors on salary,
Admin staff,
Security,
Musicians,
Drivers, etc.,
then the church must:
deduct PAYE,
remit to the State Internal Revenue Service,
file PAYE returns monthly/annually.
For example in Rivers State, this is handled by the state tax authority.
4. Withholding Tax (WHT)
The church may also need to deduct withholding tax on certain payments such as:
contractors,
consultants,
vendors,
rent,
professional services.
Example: If the church pays a contractor ₦1 million for renovation, WHT may need to be deducted and remitted.
5. VAT Position
Religious activities themselves are generally not VATable.
But VAT issues can arise if the church:
runs commercial businesses,
sells goods,
operates schools/bookshops/event centers commercially.
Pure tithes, offerings, and donations are not VATable.
6. Tax Exemption Is Conditional
Tax exemption can be lost if:
church funds are diverted for private benefit,
profits are distributed,
commercial activities dominate operations.
Commercial income not applied to charitable objectives may become taxable.
7. Annual CAC Returns Still Required
Separate from tax filing, Incorporated Trustees must also file annual returns with the:
Corporate Affairs Commission
Non-filing can eventually lead to penalties or delisting issues.
Recommended Practical Steps
Obtain/confirm TIN
Open proper accounting records
Prepare yearly financial statements
File annual returns with CAC
File tax compliance returns with FIRS
Register PAYE if staff are employed
Engage a small tax consultant/accountant familiar with nonprofits
You can also review:
firs.gov.ng
cac.gov.ng