Personal Income Tax (Amendment) Act, 2011


The Personal Income Tax (Amendment) Act 2011 ("PIT 2011") has amended the Personal Income Tax Act, 2004 by consolidating all the personal income tax reliefs or allowances into one Consolidated Tax Allowance/Relief ("CTAR") of 21% of an individual's gross annual income. The residue of a person's gross income is then liable to a graduating personal income tax rate of between 7% to 24%.

Another new tax provision in this legislation is the requirement that expatriate income is now liable to personal income tax charge in Nigeria where the employer of the expatriate is based in Nigeria, or has a fixed base for doing business in Nigeria or where the employee resides and works in Nigeria for a cumulative period of 183 days in one calendar month. This new provision is however subject to any double taxation prevention treaty ("DTT") that the Nigerian National Assembly has ratified as a DTT with another country.

Criticism of this new Law include its emphasis on direct taxation in stead of indirect taxation; higher taxes on the low and high economy earners to the benefit of the middle class; controversy over its commencement date; etc.

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