CHURCHES AND TAX EXEMPTION IN NIGERIA: SEPARATING LEGAL MYTH FROM STATUTORY REALITY

Abstract

Talk about church taxation in Nigeria runs on a handful of confident assertions. Churches do not pay tax. Registration as incorporated trustees settles the exemption question once and for all. Offerings lie beyond the reach of any auditor. Clergy fall outside PAYE. An exempt body has no returns to file. Each of these claims deserves to be measured against what the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025 actually say, and that is what this article attempts. Nigerian law, on a fair reading of the text, exempts particular profits and gains arising from educational, religious or charitable activity of a public character, on condition that the profits or gains do not come from a trade or business. Exemption attaches to income of a certain kind. It does not attach to a religious body as such, covering everything the body happens to do. Registration and the bar on distributing surplus go to public character; they leave commercial income, employment remuneration, taxable supplies, dutiable instruments and deduction-at-source duties to be dealt with under the provisions that govern them. Working from that starting point, the article sets out a workable taxonomy of exempt receipts, taxable activities and continuing compliance duties, and explains why administrative scrutiny has to stay neutral and evidence-driven rather than drifting into theological assessment or unequal treatment. It closes with proposals for clearer official guidance, consistent accounting classification, properly documented related-party dealings and sector education able to displace inherited slogans with genuine statutory analysis.