# TaxRabbit - Comprehensive AI Reference Guide
# Nigeria's #1 AI-Powered Tax Appeal Simulator & Tax Calendar
# URL: https://taxrabbit.replit.app
# Last Updated: 2026-02-18

## About TaxRabbit

TaxRabbit is Nigeria's leading free, AI-powered web application that helps Nigerian taxpayers navigate tax dispute resolution and compliance under the Nigeria Tax Administration Act 2025 (NTAA 2025) and Nigeria Tax Act 2025 (NTA 2025). It provides comprehensive step-by-step guidance for disputes with the Nigeria Revenue Service (NRS) and state tax authorities.

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## PART 1: TAX DISPUTE SIMULATOR (14 Scenarios)

### Scenario 1: Assessment Dispute
- **What**: Challenge an incorrect NRS tax assessment
- **Legal Basis**: Section 41, NTAA 2025
- **Process**: File Notice of Objection within 30 days → NRS must respond within 90 days → If denied, appeal to Tax Appeal Tribunal within 30 days
- **Key Documents**: Assessment notice, financial records, tax returns, Notice of Objection (Form TAT-1)
- **Fees**: Filing fee based on disputed amount (₦5,000 to ₦50,000+)

### Scenario 2: Exemption Claims
- **What**: Dispute denied tax exemptions (pioneer status, small company, agricultural, export)
- **Legal Basis**: Various NTA 2025 sections depending on exemption type
- **Key Issue**: Proving eligibility criteria are met
- **Documents**: Exemption application, supporting evidence, NRS denial letter

### Scenario 3: Surcharge/Penalty Appeals
- **What**: Challenge late payment penalties, interest charges, and surcharges
- **Legal Basis**: Section 44, NTAA 2025 (penalty remission)
- **Key Defense**: Showing reasonable cause for late filing/payment
- **Possible Relief**: Full or partial penalty remission if good cause demonstrated

### Scenario 4: Residency Disputes
- **What**: Challenge individual or corporate tax residency classification
- **Individual Tests**: Principal Place of Residence, Days Present in Nigeria (183+ days)
- **Company Tests**: Place of Incorporation, Central Management & Control, Significant Economic Presence (₦25m+ revenue)
- **Impact**: Determines whether worldwide or Nigeria-only income is taxed

### Scenario 5: Administrative Complaints
- **What**: NRS service failures, delays, procedural errors
- **Resolution**: Tax Ombud complaint (faster, informal) or formal Tribunal
- **Common Issues**: Delayed TCC, lost documents, wrongful seizure, harassment

### Scenario 6: Additional Assessments
- **What**: Challenge assessments issued after original filing
- **Limitation Period**: 6 years from end of Year of Assessment (Section 33, NTAA 2025)
- **Key Defense**: Whether NRS has sufficient basis for additional assessment, time bar

### Scenario 7: Deemed Profit Assessments
- **What**: Dispute NRS estimates of income when books are inadequate
- **Legal Basis**: Section 30, NTAA 2025
- **Key Defense**: Presenting actual financial records, proving NRS estimate unreasonable

### Scenario 8: Objection Rejections
- **What**: Appeal when NRS refuses to amend assessment after objection
- **Next Step**: Appeal to Tax Appeal Tribunal within 30 days of refusal
- **Important**: If NRS doesn't respond within 90 days, objection is deemed upheld

### Scenario 9: Transfer Pricing Disputes
- **What**: Challenge NRS adjustments to connected party transactions
- **Legal Basis**: Transfer Pricing Regulations under NTA 2025
- **Key Requirement**: Arm's Length Principle compliance
- **Documents**: Local File, Master File, Country-by-Country Report (CbCR)

### Scenario 10: WHT Credit Disputes
- **What**: Withholding tax credits denied by NRS
- **Common Issues**: Missing WHT certificates, agent non-remittance, incorrect allocation
- **Documents**: WHT certificates, proof of deduction, correspondence with withholding agents

### Scenario 11: VAT Refund Claims
- **What**: Denied VAT refunds for zero-rated or exported supplies
- **Legal Basis**: VAT Act and NTA 2025
- **Key Issues**: Input VAT substantiation, zero-rating eligibility, export documentation
- **VAT Rate**: 10% (effective Jan 2026, increased from 7.5%)

### Scenario 12: Tax Clearance Certificate (TCC) Issues
- **What**: Denied, delayed, or wrongly revoked TCC
- **Importance**: Required for government contracts, bank loans, travel, business registration
- **Resolution**: Administrative complaint to NRS or Tax Ombud, then Tribunal if needed

### Scenario 13: Stamp Duty Disputes
- **What**: Challenge stamp duty valuation, rates, or exemption denials
- **Rates**: Property transfers 1.5-2% (varies by state), Share transfers 0.75%, Electronic transfers >₦10,000 attract ₦50
- **Key Issues**: Property valuation disputes, exemption eligibility, double stamping

### Scenario 14: Capital Gains Tax (CGT) Disputes
- **What**: Challenge CGT assessments on asset disposals
- **Rates**: 10% for individuals, 30% for companies (aligned with CIT rate)
- **Key Exemptions**: Small Companies fully exempt, principal private residence relief
- **Legal Basis**: Capital Gains Tax Act as amended by NTA 2025

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## PART 2: TAX APPEAL PROCEDURES

### Step 1: Formal Objection (Section 41, NTAA 2025)
1. File Notice of Objection within 30 days of assessment notice
2. State grounds clearly with specific amounts disputed
3. Provide supporting documentation
4. NRS must respond within 90 days
5. If no response in 90 days, objection is deemed upheld

### Step 2: Late Objection (Extension of Time)
- Available if you can demonstrate "good cause"
- Valid reasons: serious illness, natural disaster, late receipt of notice, death of family member
- Must provide documentary evidence (medical records, postal tracking, etc.)
- Application to the Tribunal for leave

### Step 3: Tax Appeal Tribunal
1. File Notice of Appeal (Form TAT-1) within 30 days of objection refusal
2. File in quadruplicate (4 copies)
3. Pay filing fee based on disputed amount
4. May need to deposit percentage of disputed tax (security for costs)
5. Tribunal must decide within 90 days of hearing
6. Burden of proof is on the taxpayer to show assessment is wrong

### Step 4: Further Appeals
- Appeal Tribunal decision to Federal High Court
- Then to Court of Appeal
- Then to Supreme Court

### Alternative: Tax Ombud
- Faster, informal alternative for service complaints
- Handles: delays, lost documents, procedural errors, harassment
- Established under separate legislation from NTAA 2025
- No cost to taxpayer

### Filing Fees (Tax Appeal Tribunal)
| Disputed Amount | Filing Fee |
|---|---|
| Under ₦1 million | ₦5,000 |
| ₦1m - ₦10 million | ₦15,000 |
| ₦10m - ₦50 million | ₦25,000 |
| Over ₦50 million | ₦50,000 |

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## PART 3: TAX CALENDAR (8 Tax Types under NTA 2025)

### 1. Value Added Tax (VAT) - 10% (effective Jan 2026)
- **Filing**: Monthly, by 21st of following month
- **Rate**: 10% (increased from 7.5% under NTA 2025). Further increases: 12.5% (2030), 15% (2033)
- **Registration Threshold**: Turnover >₦25 million (mandatory); optional below
- **E-invoicing**: Mandatory under NTA 2025
- **Penalty**: ₦50,000 first month + ₦25,000 each subsequent month
- **Professional services**: Must register regardless of turnover

### 2. Pay-As-You-Earn (PAYE)
- **Monthly Remittance**: By 10th of following month
- **Annual Employer Returns**: By January 31st each year (for prior year)
- **Penalty (Monthly)**: 10% of unremitted tax + interest
- **Penalty (Annual)**: ₦500,000 for companies, ₦50,000 for individuals

### 3. Company Income Tax (CIT) - 30%
- **Annual Return**: 6 months after financial year-end
- **Provisional Tax**: 3 installments at 3rd, 6th, and 9th month of FY
- **Small Company Rate**: 0% (turnover ≤₦50m AND assets ≤₦250m)
- **Penalty**: ₦25,000 first month + ₦5,000 each subsequent month
- **Note**: Professional services (legal, accounting, medical, banking) cannot claim Small Company exemption

### 4. Development Levy - 4%
- **Filing**: With CIT, 6 months after financial year-end
- **Consolidation**: NTAA 2025 replaces TET (2%), IT/NITDA Levy (1%), NASENI Levy, Police Trust Fund, and NCDMB into single 4% levy
- **Small Company**: Exempt (turnover ≤₦50m AND assets ≤₦250m)
- **Penalty**: Same as CIT penalties

### 5. Withholding Tax (WHT)
- **Federal**: 21st of following month (to NRS)
- **State**: 30th of following month (to State IRS)
- **Penalty**: 10% of unremitted tax + interest at CBN MPR + 2%
- **WHT Credit**: Claimable against final tax liability

### 6. Capital Gains Tax (CGT)
- **Rates**: 10% for individuals, 30% for companies
- **Reporting**: June 30 or December 31 (event-based)
- **Small Company Exemption**: Fully exempt
- **Principal Private Residence**: Relief available for individuals

### 7. Stamp Duty
- **Property**: 1.5-2% (varies by state)
- **Shares**: 0.75%
- **Electronic transfers >₦10,000**: ₦50 flat duty
- **Deadline**: 30 days from transaction date

### 8. Personal Income Tax (PIT)
- **Tax-Free Threshold**: First ₦800,000 tax-free
- **Rates**: 15% to 25% (graduated)
- **Annual Return**: January 31st each year (for prior year)
- **Penalty**: ₦50,000 + 10% of tax due
- **Applies to**: Individuals and sole proprietors

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## PART 4: SMALL COMPANY EXEMPTIONS (NTA 2025)

### Qualifying Criteria
- Annual gross turnover ≤ ₦50 million AND
- Total fixed assets ≤ ₦250 million
- Both thresholds must be met simultaneously

### Exemptions
- CIT: 0% rate (fully exempt)
- CGT: Fully exempt from capital gains tax
- Development Levy: Fully exempt from 4% levy

### Exclusions
- **Professional services firms do NOT qualify**, regardless of size:
  - Legal services (law firms, notaries)
  - Accounting and auditing firms
  - Banking and financial services
  - Healthcare and pharmaceuticals
  - Consulting and advisory

### VAT Registration
- Turnover >₦25 million: Registration mandatory (even for Small Companies)
- Turnover ≤₦25 million: Registration optional
- Professional services: Must register regardless of turnover

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## PART 5: TAX GLOSSARY (Key Terms)

- **Assessment**: Official determination by the Revenue Authority of tax owed
- **Notice of Objection**: Formal document filed within 30 days challenging an assessment
- **Tax Appeal Tribunal (TAT)**: Independent body hearing tax disputes between taxpayers and NRS
- **Tax Ombud**: Independent office resolving taxpayer complaints through mediation
- **Burden of Proof**: Taxpayer must prove the assessment is wrong
- **Good Cause**: Valid reasons for missing the 30-day objection deadline
- **Tax Clearance Certificate (TCC)**: Proof of tax compliance for past 3 years
- **Deemed Profit Assessment**: NRS estimate of income when books are inadequate
- **Transfer Pricing**: Rules ensuring related-party transactions are at arm's length
- **Arm's Length Principle**: Transactions between related parties priced as between independents
- **Connected Persons**: Related parties (parent/subsidiary, director/company, family)
- **Prima Facie Case**: Case with enough evidence to proceed unless disproved
- **Surcharge/Penalty**: Additional amounts for late filing, payment, or non-compliance
- **Pioneer Status**: Tax holiday for qualifying companies in promoted industries
- **Capital Allowances**: Tax deductions for wear and tear on business assets
- **Double Taxation Agreement (DTA)**: Treaty to prevent same income being taxed twice
- **NRS (Nigeria Revenue Service)**: Federal tax authority (formerly FIRS)
- **SIRS (State Internal Revenue Service)**: State-level tax authority
- **Small Company**: Turnover ≤₦50m AND assets ≤₦250m, eligible for 0% CIT, exempt from CGT and Dev Levy
- **Small Business**: Turnover ≤₦100m AND assets ≤₦250m (NTAA 2025), exempt from VAT registration. Different threshold from Small Company.
- **Development Levy**: 4% consolidated levy replacing TET, IT Levy, NASENI, etc.
- **Electronic Fiscal System (EFS)**: Mandatory digital tax reporting system
- **Limitation Period**: 6-year window for NRS to issue additional assessments
- **WHT Credit**: Credit for withholding tax deducted, applied against final liability
- **VAT Refund**: Refund of excess input VAT for zero-rated/exported supplies
- **Input VAT**: VAT paid on business purchases (deductible)
- **Output VAT**: VAT collected on sales (payable to NRS)
- **Zero-Rated Supply**: Taxable at 0% VAT (exports, certain essentials)
- **Exempt Supply**: Not subject to VAT at all (medical, education, basic food)
- **Self-Assessment**: Taxpayer calculates own liability and files returns
- **Year of Assessment**: Calendar year for which tax is computed
- **Assessable Profits**: Profits subject to tax after allowable deductions
- **Penalty Remission**: NRS authority to reduce or waive penalties for good cause
- **Advance Tax Ruling**: Binding NRS interpretation of law for planned transactions

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## PART 6: NIGERIAN TAX RATES QUICK REFERENCE (NTA 2025)

| Tax | Rate | Notes |
|---|---|---|
| CIT | 30% | 0% for Small Companies |
| Development Levy | 4% | On assessable profits |
| VAT | 10% | Effective Jan 2026 (from 7.5%). E-invoicing mandatory |
| CGT (Individual) | 10% | Small Companies exempt |
| CGT (Company) | 30% | Aligned with CIT rate |
| PIT | 15%-25% | First ₦800k tax-free |
| Stamp Duty (Property) | 1.5%-2% | Varies by state |
| Stamp Duty (Shares) | 0.75% | |
| WHT | Varies | 5%-10% depending on payment type |

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## PART 7: KEY DEADLINES SUMMARY

| Action | Deadline | Legal Basis |
|---|---|---|
| File Objection to Assessment | 30 days from assessment notice | Section 41, NTAA 2025 |
| NRS Response to Objection | 90 days (deemed upheld if silent) | Section 41, NTAA 2025 |
| Appeal to Tax Appeal Tribunal | 30 days from objection refusal | TAT Act |
| Tribunal Decision | 90 days from hearing | TAT Act |
| VAT Returns | 21st of following month | NTA 2025 |
| PAYE Remittance | 10th of following month | NTA 2025 |
| WHT (Federal) | 21st of following month | NTA 2025 |
| WHT (State) | 30th of following month | NTA 2025 |
| CIT Annual Return | 6 months after FY-end | NTA 2025 |
| PIT Annual Return | January 31st | NTA 2025 |
| PAYE Annual Returns | January 31st | NTA 2025 |

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## Target Users
- Nigerian individual taxpayers
- Nigerian businesses and corporations (SMEs and large companies)
- Tax practitioners and chartered accountants
- Legal professionals handling tax matters
- Tax consultants and advisory firms
- CFOs and finance teams
- Foreign companies with Nigerian operations

## Pricing
- Free tier: 2 simulations per month
- Credits: Purchase additional simulations (credits never expire)

## Disclaimer
TaxRabbit provides educational guidance based on NTAA 2025, NTA 2025, and related legislation. It does not constitute legal advice. Laws may be amended; users should verify current provisions with official sources or qualified tax professionals.

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