PERSONAL INCOME TAX ACT (AMENDMENT), 2011
Act · Finance
Policy date: 2011-01-01
An Act amends Nigeria's Personal Income Tax framework, introducing relief allowances and clarifying tax obligations. It targets employed individuals, self-employed persons, and employers to improve compliance and modernize tax administration.
PERSONAL INCOME TAX ACT (AMENDMENT), 2011
What Is This Policy?
An amendment Act that significantly reformed Nigeria's personal income tax framework, introducing consolidated relief allowances, clarifying the tax obligations of state governments, and strengthening enforcement.
Who Does It Target?
Employed individuals and self-employed persons subject to personal income tax State Internal Revenue Services administering PITA Employers responsible for PAYE deduction FIRS in relation to federal employees and non-residents
What Does It Aim to Achieve?
Modernise personal income tax administration, improve voluntary compliance, harmonise tax relief provisions, and clarify the respective roles of FIRS and state revenue services.
Key Features
Consolidated Relief Allowance: Introduced a single consolidated relief allowance (CRA) of N200,000 plus 20% of gross income, replacing multiple smaller reliefs. PAYE Enhancement: Strengthened the Pay As You Earn framework requiring all employers to deduct and remit tax monthly. Self-Assessment: Promotes self-assessment filing by individuals and self-employed persons. Residency-Based Taxation: Clarified that personal income tax is based on place of residence, not employment location.
Current Status
Rollout Stage: Active Coverage: Nationwide personal income tax system Beneficiaries: Individual taxpayers through simpler reliefs; governments through improved collection Funding: Revenue measure
How to Access
All taxable individuals must file annual self-assessment returns Employers must remit PAYE deductions monthly to the relevant state internal revenue service Non-compliance attracts penalties and late payment interest Application method: File returns with your state Internal Revenue Service or FIRS for federal employees.
Important Terms
Tax is paid in the state of residence, not the state of employment CRA is the minimum relief; other specific reliefs may also apply Non-compliance with PAYE obligations exposes employers to personal liability
Official Resources
Website: https://www.firs.gov.ng Contact: Federal Inland Revenue Service (FIRS) / State Internal Revenue Services
Legal Framework
The Personal Income Tax Act (Amendment) 2011 amended the PITA, which is the primary legislation taxing individual income in Nigeria. It operates under the 1999 Constitution (Second Schedule — personal income taxation concurrent with states), the Federal Inland Revenue Service (Establishment) Act 2007, and State Internal Revenue Service laws. The Finance Acts (2019–2023) have since further amended PITA. The OECD Model Tax Convention provides international standards on individual income taxation.