RESOURCES · GLOSSARY
Glossary of revenue terms
Tax administration has a vocabulary of its own, and a taxpayer should not have to learn it in order to understand a demand notice. These are the terms that appear on our documents, in plain language.
Assessment and liability
| Term | What it means |
|---|---|
| Assessment | The Service’s formal determination of how much tax a taxpayer owes for a year, served as a notice of assessment. |
| Year of assessment | The calendar year in which income of the preceding year is assessed to tax. Income earned in 2025 is assessed in the 2026 year of assessment. |
| Taxable income | Gross income less the Consolidated Relief Allowance and all statutory deductions. Tax is charged on this figure, not on gross income. |
| Consolidated Relief Allowance (CRA) | The principal relief: the higher of ₦200,000 or 1% of gross income, plus 20% of gross income. |
| Graduated bands | The six rates of personal income tax, running from 7% on the first ₦300,000 of taxable income to 24% above ₦3,200,000. |
| Effective rate | Total tax expressed as a percentage of gross income. Always lower than the top band rate because of reliefs and the graduated structure. |
| Best of judgement assessment | An assessment raised on the Service’s own estimate where a taxpayer has not filed or has filed inadequately. Section 65, Personal Income Tax Act. |
| Final and conclusive | The status of an assessment that has not been objected to within thirty days. It can then only be reopened for fraud, wilful default or neglect. |
| Additional assessment | An assessment raised after the original, where further income or an error comes to light. Carries a fresh right of objection. |
Registration and identity
| Term | What it means |
|---|---|
| TIN | Taxpayer Identification Number — the permanent, national number identifying a taxpayer. Format NNNNNNNN-NNNN. |
| NIN | National Identification Number, issued by NIMC. Used to verify the identity of an individual taxpayer at registration. |
| Taxpayer register | The master record of every registered taxpayer in the State, with type, sector, LGA, ward, address and status. |
| Enumeration | Field capture of premises, properties and economic activity, with geo-coordinates and photographs, to widen the taxpayer register. |
| Business premises registration | Registration of each physical location from which a business operates. Per premises, renewed annually. |
| Taxpayer status | Active, Dormant, Suspended, Deregistered or Pending — the state of a record in the register. |
| Change of particulars | Notification of a change of name, address, activity, ownership or contact details. |
| Cessation | Formal notice that a business has stopped trading, triggering a final assessment and deregistration. |
Billing, collection and accounting
| Term | What it means |
|---|---|
| Demand notice | The bill served on a taxpayer, showing the revenue head, the amount, the due date and the payment reference. Reference prefix DN. |
| Payment reference | The code that identifies the taxpayer, the revenue head and the amount, and that every accredited channel recognises. |
| Revenue head | A single approved source of revenue, with a code, a category, a collecting MDA and a statutory basis. |
| Revenue head code | The eight-digit code identifying a revenue head, appearing on every notice and receipt. |
| Treasury single account | The consolidated State account into which every collection settles. Replaced more than 240 separate MDA accounts. |
| Collecting bank | A bank accredited to accept payments against a Service payment reference and settle them to the treasury single account. |
| PSSP | Payment Solution Service Provider — an accredited provider such as Remita, Interswitch or Paystack that acquires payments and settles them. |
| Reconciliation | Daily matching of bank settlement files against the revenue ledger. Unmatched items are queried within 24 hours. |
| Receipt number | The unique number on an electronic receipt, used to verify payment. Reference prefix RCT. |
| Cost of collection | The Service’s operating cost expressed as a percentage of revenue collected. Currently 4.1%. |
Taxes, levies and charges
| Term | What it means |
|---|---|
| PAYE | Pay As You Earn — personal income tax deducted by an employer from an employee’s emoluments and remitted monthly. |
| Direct assessment | Assessment of a taxpayer whose income is not taxed at source, on the basis of an annual return filed by 31 March. |
| Presumptive tax | A flat annual charge applied where income cannot readily be ascertained, chiefly in the informal sector. |
| Withholding tax (WHT) | Tax deducted at source from rent, contracts, fees, commission, dividends, interest and royalties, credited against final liability. |
| Development levy | A flat annual levy of ₦500 on every taxable adult resident in the State. |
| Consumption tax | Five per cent charged on goods and services consumed in hotels, restaurants and event centres. |
| Land use charge | The consolidated annual property charge replacing ground rent, tenement rate and neighbourhood improvement charge. |
| Ground rent | Annual rent reserved to the Governor on land held under a statutory right of occupancy. |
| Stamp duty | Duty charged on written instruments, either at a fixed amount or ad valorem on the value the instrument carries. |
| Hackney permit | The permit required in addition to a vehicle licence where a vehicle carries passengers for hire. |
Disputes and enforcement
| Term | What it means |
|---|---|
| Notice of objection | A taxpayer’s written challenge to an assessment, filed within thirty days and stating the grounds and the amount contended for. |
| Notice of refusal to amend | The Service’s decision declining to amend an assessment after an objection. Opens the right of appeal. |
| Tax Appeal Tribunal | The independent tribunal to which a taxpayer may appeal within thirty days of a notice of refusal to amend. |
| Distraint | Seizure of goods to satisfy an undisputed tax debt, after notice and with the written authority of the Executive Chairman. |
| Garnishee order | A court order directing a taxpayer’s bank to pay an established tax debt to the Service from the taxpayer’s account. |
| Sealing | Closure of business premises for persistent default, after a demand notice and the statutory notice period. |
| Tax audit | Examination of a taxpayer’s records to verify declared income, deductions and remittances, covering up to six years. |
| Penalty | A statutory sum imposed for a breach — late filing, late payment, failure to register — fixed by law and not variable by an officer. |
| Interest | A time charge on unpaid tax, at the Central Bank monetary policy rate plus five per cent, running from the due date. |
| Waiver | Relief from a penalty or interest, granted only by the Board and only on documented grounds. |
| Whistleblower report | A report of an unlawful demand, a diverted payment or misconduct by an officer, which may be made anonymously. |
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