Section 51 Nigeria Tax Administration Act 2025

Section 51 of the Nigeria Tax Administration Act 2025 is about Deduction at source. It provides as follows:

(1) Where any payment is made to a person, the person making the payment shall, at the date when payment is made or otherwise settled, deduct the tax at the rate prescribed in regulations relating to deduction of tax at source.

(2) In the case of dividend, interest, rent, royalty, directors’ fee and payment to entertainers and sportspersons, the tax, when paid over to the relevant tax
authority, shall be the final tax due from a non-resident recipient of the payment.

(3) Dividend distributed by a Nigerian company and received by a person after deduction of the tax prescribed in this section and regulations relating to deduction of tax at source, shall be regarded as franked investment income of
the person receiving the dividend and shall not be charged to further tax.

(4) Where a franked investment income is redistributed and tax is to be accounted for on the gross amount of the distribution in accordance with
regulations relating to deduction of tax at source, the company may set-off
the amount deducted at source which it has itself suffered on the same income.

(5) Interest on short term securities and corporate bonds earned by an individual after deduction of tax at source, shall not be charged to further tax.

(6) Income tax chargeable on an employee whether or not the assessment has been made, shall be deducted from any emolument payable, or from any payment made on account of the emolument, by the employer to the employee.

(7) In arriving at the amount of income tax to be deducted from any payment of or on account of the emolument to an employee, the employer shall ensure that the aggregate amount of all the deductions made during a year of assessment shall equal the income tax chargeable on the employee in respect of its emoluments for that year.

(8) Notwithstanding subsections (1) to (6), a non-resident company that provides technical, consulting, professional or management services to a labelled startup shall be subjected to a 5% deduction on income derived from the provision of such services, which shall be the final tax to be paid by such nonresident company.

(9) For the purpose of giving effect to the provisions of this section, regulations relating to deduction of tax at source shall apply.

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