Winners of Nigerian reality TV shows may need to brace for unexpected deductions, as authorities reaffirm that such winnings are not exempt from taxation under Nigerian law.
According to the Personal Income Tax Act (PITA), any form of reward whether cash, cars, or property won on reality shows is classified as income and is therefore taxable. This clarification comes amid rising concerns and confusion over the tax implications of winnings from popular televised competitions.
Experts note that such prizes may attract Personal Income Tax (PIT), typically collected by the State Internal Revenue Service in the winner’s state of residence. For winners residing abroad, the Federal Inland Revenue Service (FIRS) steps in to collect applicable taxes.
“In some instances, organisers may deduct Withholding Tax (WHT) before releasing the prize,” a tax analyst explained. “This acts as an advance payment towards the winner’s total income tax liability.”
Additionally, if a company sponsors or pays out the prize, it may record the payment as part of its deductible marketing or promotional expenses for Company Income Tax (CIT) purposes. However, this corporate deduction does not relieve the individual winner of their personal tax obligations.
Tax professionals advise reality show contestants and winners to seek proper financial guidance to avoid legal and financial pitfalls.
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