Ogona Anita
Please sit down and read this carefully. This is a very serious matter.
Step One:
If your annual income is ₦800,000 or below, you will not pay any tax.
Step Two:
If your annual income is more than ₦800,000 but not above ₦3,000,000, the first ₦800,000 will be tax-free, but the amount above ₦800,000 will be taxed at 15%.
Example:
If you earn ₦1,300,000 in a year, the first ₦800,000 is not taxable, but the remaining ₦500,000 will be taxed at 15%, which equals ₦75,000.
That ₦75,000 is your total tax.
Step Three:
If your annual income is above ₦3,000,000 but not more than ₦12,000,000, the first ₦800,000 remains tax-free.
The income from ₦800,000 to ₦3,000,000 will be taxed at 15%, while the portion above ₦3,000,000 will be taxed at 18%.
Example:
If you earn ₦10,000,000 a year:
₦800,000 is tax-free.
From ₦800,000 to ₦3,000,000 is ₦2,200,000, taxed at 15% = ₦330,000.
From ₦3,000,000 to ₦10,000,000 is ₦7,000,000, taxed at 18% = ₦1,260,000.
Total tax = ₦330,000 + ₦1,260,000 = ₦1,590,000.
Step Four:
If you earn above ₦12,000,000 up to ₦25,000,000,
₦800,000 is tax-free,
₦2,200,000 taxed at 15%,
₦9,000,000 taxed at 18%,
any amount above ₦12,000,000 taxed at 21%.
Example:
If you earn ₦14,000,000:
₦800,000 tax-free.
₦2,200,000 × 15% = ₦330,000.
₦9,000,000 × 18% = ₦1,620,000.
Remaining ₦2,000,000 × 21% = ₦420,000.
Total tax = ₦330,000 + ₦1,620,000 + ₦420,000 = ₦2,370,000.
Step Five:
If your annual income is above ₦25,000,000 up to ₦50,000,000,
₦800,000 tax-free,
₦2,200,000 taxed at 15%,
₦9,000,000 taxed at 18%,
₦13,000,000 taxed at 21%,
any amount above ₦25,000,000 taxed at 23%.
Example:
If you earn ₦42,000,000:
₦800,000 tax-free.
₦2,200,000 × 15% = ₦330,000.
₦9,000,000 × 18% = ₦1,620,000.
₦13,000,000 × 21% = ₦2,730,000.
Remaining ₦17,000,000 × 23% = ₦3,910,000.
Total tax = ₦330,000 + ₦1,620,000 + ₦2,730,000 + ₦3,910,000 = ₦8,590,000.
Final Step:
For anyone earning above ₦50,000,000, you can calculate that yourself
If this is truly how the calculation goes, then we’re in serious trouble!
But if there’s any misunderstanding of the law, experts in taxation should please come forward and enlighten us. We are confused! 😩
