How Can a Commercial Driver in Nigeria File Personal Income Tax on a Hire Purchase Vehicle?

If you’re a driver using a hire-purchase vehicle, your Personal Income Tax (PIT) is based only on your own income, not the vehicle owner’s money.

Here’s how it works clearly:

🚗 Hire-Purchase Driver — Do You Pay Tax on Owner’s Money?

No.

You only pay tax on your profit, not the total money you generate.

Example

Let’s say in a month:

You make from driving = ₦400,000

You pay vehicle owner (hire purchase) = ₦250,000

Fuel + maintenance = ₦80,000

Your taxable income = ₦400,000 − ₦250,000 − ₦80,000 = ₦70,000

You pay tax on ₦70,000 only, not ₦400,000.

This is allowed under the Personal Income Tax Act Nigeria — you are taxed on net income, not gross income.

📋 How To File Your Tax as a Driver (Step-by-Step)

Since you’re self-employed, follow this:

Step 1: Get Your Tax ID (TIN)

Register with your State Internal Revenue Service

Example:

Rivers State → Rivers State Internal Revenue Service

Or national portal → Joint Tax Board Nigeria

You will need:

Name

Phone number

Address

Occupation (Driver)

Step 2: Estimate Your Annual Income

Calculate:

Total earnings (year)

Minus hire purchase payments

Minus expenses (fuel, repairs, union dues)

This gives your taxable income

Step 3: Fill Personal Income Tax Return

You’ll submit:

Income estimate

Occupation (Commercial driver)

Expenses

Net income

Step 4: Pay Small Tax (If Income Is Low)

Nigeria gives relief called: Consolidated Relief Allowance (CRA)

So if your income is small, your tax may be:

Very small

Or sometimes ₦0

👍 Good News for Drivers

Government usually:

Uses presumptive tax for drivers

Charges small fixed yearly tax (sometimes ₦5k–₦20k depending on state)

This makes it easier for drivers.

⚠️ Important Tip

Keep simple records:

Daily income

Fuel

Owner payment

Repairs

Even writing in a small notebook is enough.

Since you’re working as a security personnel (from your profile) and also doing driving as side hustle, you may need to:

File salary tax (PAYE) from security job

File self-employed tax for driving

But don’t worry — this is normal.