There are several tax laws that have been implanted by the government of Nigeria. One such tax is the personal income tax that has very important and basic features that should be understood by the individuals to make sure that the calculations never become an issue. The personal income tax in Nigeria is calculated according to the 2011 amendment. The rates as well as the imposition of the tax returns have been changed in this regard. In Nigeria the individuals are taxed if they meet any of the following conditions:

1. The individual is a Nigerian and making a livelihood in the country. In simple words all local Nigerians who earn and live in the country are liable to pay personal income tax.
2. The business is liable to personal income tax if it is being operated in the country. All the Nigerian companies that are operating within the country are taxed according to their income and when it comes to foreign or nonresident companies the tax is charged as per the profit that is made in this regard.

Formerly the personal income tax rates were different which were changed totally after the 11th amendment and for the same reason the personal income tax is also imposed according to the mentioned amendment. According to this amendment the consolidation tax free allowance has been changed to N200, 000 or 1% of gross income whichever is higher. In addition to 20% of gross income is also charged as tax by the government. The reimbursements and expense claims are still applicable within this law and the person can enjoy these benefits without any issue. The personal income tax exemption for the expats is only possible if the individual provides the proof that the tax returns are being filed at the home country.

The personal income tax is one of the basic requirements that the individual job or businessman needs to fulfill to ensure that the smooth processing of the public affairs run by the government keeps on moving. The amount of the personal income tax is also calculated by several income tax agents that are affiliated to number of companies working within the economy and providing the user with ease and satisfaction to carry on their affairs within time without getting into any hassle of tax calculation. The personal income tax payer also needs to file tax within the government designated banks and other channels that are authorized by the government to do so and before the tax period ends the government also runs several campaigns to create the general public awareness so that the payment of tax is never late.

PAYE calculator can be found online free of charge


www.InnerKonsult.com Nigeria Accounting, Tax, Audit & Investigation service 08038460036,

To identify means of increasing revenue generated from income tax to the government, by finding out the challenges of income taxation in Nig, aeriand ways all these can be effectively tackled.
In-order to achieve the purpose of this research, the following are the objectives of the research:

To identify the challenges of Income Taxation in Nigeria.
To identify the causes of tax evasion in Nig.eria
To identify ways of properly addressing the challenges of income taxation in Nigeria order to capture more income earners into the tax net.