Many Nigerian especially those in the real sectors have been
paying their taxes regularly but most cannot state how their employers arrive
at those strange figures. The essence of this post is to help you understand
the recent amendment in the personal income tax law of Nigeria as at 14 June 2011.
Key changes
· Introduction of a consolidated tax free
allowance of N200,000 or 1% of gross income, whichever is higher, plus 20% of
the gross income.
NB:
Gross emolument (or income) is defined to include benefits in kind, gratuities,
superannuation and any other incomes derived solely by reason of employment.
· Principal place of
residence redefined to include places where branch offices and operational site
of companies are situated.
. Benefit-In-Kind (B.I.K) may be defined as those benefits or
perquisites that accrue to a person by reason of the office and/or position
he/she occupies. Benefits in kind include such benefits as official car,
official accommodation, cooks, gardeners, security etc