02/01/2026
Tax Awareness- Nigeria Tax Act 2025 (NTA 2025)/ Faith-Based Organizations and NGOs
Did you know how Nigeria Tax Act 2025 (NTA 2025) affect you as faith-based organizations (Churches and Mosques) and Non-Governmental Organizations (NGOs)?
Under Chapter Two of the Nigeria Tax Act 2025, profits arising from the disposal of assets and donations received by religious organizations and NGOs are exempt from tax.
However, notwithstanding these exemptions, religious organizations and NGOs are required to comply with the following statutory obligations to avoid penalties and sanctions:
1. Tax Registration and Record-Keeping
a. Obtain a Tax Identification Number (TIN) by registering the Church, Mosque, or NGO with the nearest Nigeria Revenue Service (NRS).
b. Ensure that all transactions are supported with proper invoices/receipts, which must clearly show:
• Name and address of the supplier
• Date of transaction or supply
• Name of the Church/Mosque/NGO in the receipt
• Gross transaction amount
• VAT charged and applicable VAT rate
2. VAT-Exempt Supplies (Not Vatable) – Chapter Six, NTA 2025
The following transactions and supplies are exempt from VAT, Church, Mosque and NGO should not pay vat on them:
a. Oil and gas exports
b. Crude petroleum oil and feed gas for all processed gas
c. Goods purchased for use in humanitarian donor-funded projects
d. Baby products
e. Locally manufactured sanitary towels, pads, or tampons
f. Military hardware, arms, ammunition, and locally manufactured uniforms supplied to Nigerian armed forces, paramilitary, and security agencies
g. Shared passenger road transport services (public transportation)
h. Purchase, hire, rental, or lease of tractors, ploughs, and agricultural equipment
i. Supplies consumed by approved entities in export processing or free trade zones, provided they are used for approved activities
j. Goods or services supplied to diplomatic missions or persons covered under the Diplomatic Immunities and Privileges Act for public interest, non-profit purposes
k. Plays and performances conducted by educational institutions as part of learning
l. Land or buildings, including interests in land or buildings
m. Money or securities, including interest thereon
n. Government licenses
o. Assistive devices and disability-related products (e.g., hearing aids, wheelchairs, braille materials)
3. Zero-Rated VAT Supplies (VAT at 0%)
The following taxable supplies attract VAT at a 0% rate: i.e Church. Mosque and NGO should pay 0% rate on the purchase of the following items
a. Basic food items
b. Medical and pharmaceutical products, including herbal medicines
c. Educational books and materials
d. Fertilizers
e. Locally produced agricultural chemicals
f. Locally produced veterinary medicines
g. Locally produced animal feeds
h. Live cattle, goats, sheep, and poultry
i. Agricultural seeds and seedlings
j. Electricity generated by GENCOs and supplied to the National Grid or NBET
k. Electricity transmitted by TCN to DISCOs
l. Medical services
m. Tuition for nursery, primary, secondary, and tertiary education
n. Exported goods (excluding oil and gas)
o. Exported services
p. Exported incorporeal property
q. Medical equipment
r. Electric vehicles
4. PAYE Obligations
Churches, Mosques, and NGOs must deduct Pay-As-You-Earn (PAYE) from the salaries, allowances, and emoluments of:
• Employees/staffs
• General Overseers emoluments
• Trustees fees/ emolument
PAYE must be remitted to the State Internal Revenue Service where the employee or beneficiary resides.
5. Withholding Tax (WHT) on Rent, Hire, or Lease
• Deduct 10% WHT on rent, hire, or lease payments for:
o Church premises
o Equipment or facilities
• Remit the tax:
To Nigeria Revenue Service (NRS) using the landlord’s TIN (corporate landlord), or
or To the State Internal Revenue Service (individual landlord)
Exemption for Small Churches/NGOs (Effective 1 January 2026):
Churches/NGOs with annual turnover of ₦100 million and below are not required to deduct WHT at source, provided that:
a. The supplier/vendor has a valid TIN; and
b. The transaction value does not exceed ₦2,000,000 in a calendar month.
6. WHT on Professional and Consultancy Fees
Deduct 5% WHT on commissions, consultancy, technical, professional, or management fees paid to consultants, professionals, vendors, or suppliers, and remit to the appropriate tax authority.
7. VAT on Asset Acquisition
VAT must be paid on all assets acquired, except:
• Land and buildings
• Rent on properties
Provide the Church/NGO TIN to vendors to enable proper VAT remittance and allow for input VAT claims where applicable.
8. Filing of Companies Income Tax (CIT) Returns
Churches, Mosques, and NGOs must file annual CIT returns within six (6) months after the financial year-end.
For example: 2025 returns must be filed on or before 30 June 2026.
9. VAT Returns filing: Filing will be nil
10. Employer Annual Declaration
File the Employer Annual Declaration with the State Internal Revenue Service on or before 31 January following the year of assessment.
Example: 2025 declaration due on or before 31 January 2026.
11. Update the tax authority any change of address, phone number, email on time to avoid penalty
Conclusion
The above represent key compliance areas that Churches, Mosques, and NGOs must carefully observe to avoid penalties, interest, and regulatory sanctions.
References
• Federal Republic of Nigeria Official Gazette No. 168, Vol. 111, 2 October 2024 – Deduction of Tax at Source (Withholding) Regulations, 2024 (Pages B755–766)
• Federal Republic of Nigeria Official Gazette No. 168, Vol. 111, 26 June 2025 – Value Added Tax Regulations (Pages A470–474, 489–491)
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