TaxLane's calculators and guides use these terms — here's what each one means, in plain language, linked to where it's actually used.
Capital Gains Tax (CGT) is charged on the profit — the chargeable gain — from disposing of an asset such as property or shares. An individual's gain is aggregated into total taxable income and taxed through the same progressive PAYE bands; a company's gain is instead folded into total profits and taxed at the existing Companies Income Tax rate.
Company Income Tax (CIT) is the federal tax on a registered company's profits — 30% for most companies, or 0% for a small company that meets the turnover and fixed-assets ceilings. Filing a return is required either way; only the amount owed changes.
Direct Assessment is how a self-employed person with proper records is taxed on actual business profit — turnover less allowable business expenses and any capital allowance — at the same progressive bands PAYE uses on employment income, instead of the flat-rate Presumptive Tax.
See it in TaxLane's Self-Employed (Direct Assessment) calculator →
Employer Cost of Employment is the full statutory cost of hiring someone beyond gross pay — an employer's pension, NHIS, NSITF, and ITF contributions, on top of the employee's own share.
Input VAT Credit is the VAT you've already paid on goods, services, and fixed assets bought for your business, which you can offset against the VAT you collect from customers — provided your business is VAT-registered, you hold a valid VAT invoice, and you claim within five years of the purchase.
Land Use Charge (LUC) is a state-level annual property tax — separate from the federal taxes TaxLane's other calculators cover — levied on land and buildings within a given state to fund state and local government services.
The Minimum-Wage Exemption fully exempts anyone earning at or below ₦70,000 a month from PAYE on their regular income — a large termination benefit above its own separate relief cap is still taxed.
The Nigeria Revenue Service (NRS) is Nigeria's federal tax authority — it collects PAYE, VAT, CIT, and the other federal taxes TaxLane calculates. It was called the Federal Inland Revenue Service (FIRS) until a 2025 Act renamed it, effective 1 January 2026.
The Nigeria Tax Act, 2025 (No. 7) is the gazetted law — alongside the companion Nigeria Tax Administration Act, 2025 (No. 5) — behind the rates, thresholds, and rules TaxLane's calculators use, in force from 1 January 2026.
Nigeria switched PAYE regimes on 1 January 2026. The old regime (in force through 2025) taxed income from ₦1 with no tax-free band, at rates from 7% to 24%, using a Consolidated Relief Allowance; the new regime instead uses itemized reliefs and progressive bands starting at 0%.
Pay As You Earn (PAYE) is Nigeria's progressive tax on employment income, deducted at source by an employer. The first ₦800,000 of annual taxable income is tax-free, with bands rising to 25% on income above ₦50,000,000, after reliefs like rent relief and pension contributions are deducted.
Presumptive Tax is a simplified flat-rate tax for freelancers and informal-sector earners whose income can't be reliably ascertained from records: turnover below ₦12,000,000 owes nothing, turnover at or above that floor is taxed by default at 1% of turnover, and you may opt out and file under full self-assessment instead.
Rent Relief lets a PAYE taxpayer deduct 20% of the annual rent they pay from taxable income, capped at ₦500,000 a year.
A company qualifies as a 'small company' for CIT purposes only if both its gross turnover (₦50,000,000 or below) and fixed assets (₦250,000,000 or below) meet their ceilings — one passing without the other still fails — in which case it pays 0% Companies Income Tax, though it must still file a return every year.
Stamp Duty is an ad valorem (or flat) duty charged on specific legal instruments — tenancy/lease agreements, property conveyances, share capital, loan capital, marketable-securities transfers, and electronic transfers above a threshold — and must be paid within 30 days of the instrument being executed.
A Tax Clearance Certificate (TCC) is proof you've actually paid what you owed for the last three years of assessment — distinct from a TIN, which only proves you're registered. The Nigeria Revenue Service issues a TCC for companies; your State IRS (or the FCT-IRS in Abuja) issues one for resident individuals.
Termination Benefit Relief shields part of a termination payout from tax. Under the new (2026) regime, the excess above a ₦50,000,000 cap is aggregated into ordinary taxable income and taxed through the standard PAYE bands; under the old regime, the excess above a lower ₦10,000,000 cap was instead taxed as a flat 10% capital gain.
A Tax Identification Number (TIN) — now called a Tax ID — is mandatory for every taxable person in Nigeria, including individuals earning below the tax-exempt threshold. Owing ₦0 in tax doesn't exempt you from the registration duty itself.
Value Added Tax (VAT) is a 7.5% consumption tax added to most goods and services sold in Nigeria, unchanged under the 2026 tax reform — basic food, medicine, education, exports, and some other categories are zero-rated or exempt instead.
Withholding Tax (WHT) is tax a client deducts at source from a payment — for example 5% on professional/consultancy fees or 10% on rent — and remits on your behalf. It isn't extra tax; it's a credit against what you owe when you file your annual return.