{"id":20013,"date":"2024-09-15T19:15:42","date_gmt":"2024-09-15T18:15:42","guid":{"rendered":"http:\/\/dubawa.org\/dir\/?p=20013"},"modified":"2024-09-15T19:15:46","modified_gmt":"2024-09-15T18:15:46","slug":"do-nigerians-pay-the-least-tax-globally","status":"publish","type":"post","link":"https:\/\/dubawa.org\/dir\/do-nigerians-pay-the-least-tax-globally\/","title":{"rendered":"Do Nigerians pay the least tax globally?"},"content":{"rendered":"\n

Claim<\/strong>: X user said <\/strong><\/a>Nigerians pay the lowest tax in the world.<\/p>\n\n\n

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Verdict<\/strong>: False. While Nigeria has one of the lowest tax rates globally, this does not necessarily mean its citizens pay the least taxes.<\/p>\n\n\n\n

Bill Gates, popular philanthropist and co-chair of the Bill and Melinda Gates Foundation, recently visited Nigeria to speak <\/strong><\/a>at Nutrivision 2024, a Pan-African youth dialogue on nutrition. Mr Gates said that tax collection in Nigeria is \u201cpretty low,\u201d adding that this presents a significant challenge in adequately financing critical sectors<\/p>\n\n\n\n

\u201dOver time, there are plans for Nigeria to fund the government more than it does today. The actual tax collection in Nigeria is actually pretty low,\u201d Gates said.<\/p>\n\n\n\n

His remark has continued to elicit mixed reactions among Nigerians. While some advised Mr Gates to remain silent on the issue of low tax collection, citing the alleged embezzlement of public funds by government officials in Nigeria, others agreed with the philanthropist’s views.<\/p>\n\n\n\n

One of those who backed the billionaire’s opinion was an\u00a0 X user<\/strong><\/a>, @AdloveGlobal, who claimed Nigerians pay the lowest tax in the world.\u00a0<\/p>\n\n\n\n

\u201cNigerians pay the lowest tax in the whole world,\u201d the user tweeted in response to Mr Gates\u2019 comment published by Channels TV.<\/p>\n\n\n\n

Mr Gates has been the subject of intense debate in Nigeria, with many conspiracy theories surrounding his involvement in the economy of African countries. <\/p>\n\n\n\n

Considering the topicality of the claim and its potential impact, DUBAWA decided to scrutinise it and ascertain its veracity.<\/p>\n\n\n\n

The tax rate in Nigeria explained<\/strong><\/h2>\n\n\n\n

There are different levels of taxation ranging from personal income tax to value-added tax (consumption tax) and capital gains tax among others. For proper contextualisation of this report, the various categories of taxes will be explained below: <\/p>\n\n\n\n

Personal income tax<\/strong><\/h3>\n\n\n\n

Action Aid<\/strong><\/a> describes Personal Income Tax (PIT) as a direct tax levied on personal income including wages, salaries, director’s fees, dividends, royalties, and rental income.\u00a0<\/p>\n\n\n\n

Lawpadi<\/strong><\/a> explained that the rate of income tax payable is dependent on the amount of \u2018taxable income\u2019 that the person (individual, business, community, family) is liable to pay.\u00a0<\/p>\n\n\n\n

It explained that taxable income is \u2018some or all items of income\u2019 minus allowable expenses and deductions.<\/p>\n\n\n\n

Personal Income tax in Nigeria is deducted in two ways: Pay As You Earn (PAYE) and Self-assessment tax. The PAYE is usually deducted from an employee’s income while the latter applies to self-employed people.<\/p>\n\n\n\n

Personal Income Tax is collected by The federal government and the Internal Revenue Service in the states are in charge of collecting personal tax.<\/p>\n\n\n\n

However, the Federal Inland Revenue Service<\/a> collects taxes from residents of the Federal Capital Territory, as well as from highly mobile federal workers, such as staff of the Ministry of Foreign Affairs, other Nigerians, and foreigners living abroad but earning income in Nigeria (non-residents), among others.<\/p>\n\n\n\n

The rate for PAYE in Nigeria is as follows:<\/p>\n\n\n\n