All persons who earn income are it on a temporal or permanent basis; weather employees or individual that carry out business activities are required to pay personal income tax. The state internal revenue service collect personal income tax from: individuals resident in the state, body of individual such as communities, families that run a business. Business names and partnership; Executors of estate of deceased persons and trustee. Etc.

for each year of assessment, a taxable person shall, without notice or demand therefore, file a returns of income in a prescribed form and containing the prescribed information with the tax authority of a state in which the taxable person is deemed to be a resident together with a true and correct statement in writing containing the amount of income from every sources of the year presiding the current year of assessment. An individual engaged in full time employment is taxed under the pay as you earn system. The employer withholds personal income tax from the employee’s salary or wages and pays it to the tax authorities within 10days. An individual whose only source of income is employment income from single employer must file a tax return unless his / her employment income does not exceed NGN 300,000 per year. Other individuals pay tax by financial statements and schedules, where applicable, may be made in full or, upon application, in installments.

PAYE means pay as you earn. It is a form of personal income tax payable by those on employment.

the duty of the employer as contained in the law is to deduct at source the correct amount from the salary payable to an employee as tax computed under the act each month the employer pay salary to the employee. Also, the tax deducted by the employer must be remitted to the relevant tax authority at least 10 days following the month deduction was made.