All you need to know about taxation of pharmaceutical sector in Nigeria


8/9/20231 min read

In Nigeria, the taxation of pharmaceutical industries is governed by the Federal Inland Revenue Service (FIRS), which is responsible for administering and enforcing tax laws in the country. The taxation of pharmaceutical industries in Nigeria is subject to various taxes, including corporate income tax, value-added tax (VAT), customs and excise duties, and other fees and levies.

1. Corporate Income Tax:

Pharmaceutical companies in Nigeria are required to pay corporate income tax on their taxable profits. The current corporate income tax rate for companies in Nigeria is 30%. However, small and medium-sized pharmaceutical companies with a turnover of less than 25 million naira per annum are eligible for a reduced tax rate of 20%.

2. Value-Added Tax (VAT):

Pharmaceutical products in Nigeria are generally subject to VAT at a rate of 7.5%. However, certain products such as essential medicines are exempted from VAT.

3. Customs and Excise Duties:

Pharmaceutical products imported into Nigeria are subject to customs and excise duties. The rates of duty vary depending on the type of product and the country of origin.

4. Other Fees and Levies:

Pharmaceutical companies in Nigeria may also be subject to other fees and levies such as education tax, development levy, and annual returns fees.

In conclusion, pharmaceutical industries in Nigeria are subject to various taxes, fees, and levies, which are administered and enforced by the Federal Inland Revenue Service (FIRS). It is important for pharmaceutical companies to comply with all relevant tax laws and regulations to avoid penalties and legal consequences.