CITN Personal Taxation
Past Questions
28+ verified Personal Taxation past questions for CITN. Step-by-step worked answers in 5 Nigerian languages.
Personal Taxation topics (2)
Sample Personal Taxation past questions
1. PAYE applies to:
- A. Companies only
- B. Employee salaries
- C. Imports
- D. Land
Answer: B
AI Explanation
**The reasoning** PAYE stands for **Pay As You Earn** — it's a tax collection system where income tax is deducted directly from your salary *before* you receive it. Your employer withholds the tax and remits it to the Federal Inland Revenue Service (FIRS) on your behalf. The key principle: PAYE targets **employment income**. When you work and earn a salary, a percentage is automatically removed as tax. This makes collection easier and ensures the government receives revenue regularly throughout the year, not just during annual tax filing. **Why the wrong options tempt you** - **A (Companies only)**: Companies *pay* Company Income Tax (CIT), not PAYE. PAYE is for individuals earning salaries. - **C (Imports)**: Imports attract customs duties and VAT at ports, not PAYE. - **D (Land)**: Land is subject to Capital Gains Tax when sold, or tenement rates — totally different from PAYE. **Quick takeaway** PAYE = **Pay As You Earn** = tax on **employee salaries**, deducted automatically by your employer before you get paid — it's the government's way of collecting income tax straight from the source.
2. Consolidated Relief Allowance is part of:
- A. VAT
- B. Personal income tax
- C. CIT
- D. Customs
Answer: B
3. Income tax in Nigeria is progressive — meaning:
- A. Same rate for all
- B. Higher income → higher rate
- C. Higher income → lower rate
- D. Only for poor
Answer: B
4. PAYE stands for:
- A. Pay As You Earn
- B. Personal Annual Yearly Earnings
- C. Public Allowance Yearly Estimate
- D. Paid Yearly Earnings
Answer: A
5. In Nigeria, personal income tax is administered by the:
- A. FIRS
- B. State Internal Revenue Service
- C. CBN
- D. NDIC
Answer: B
6. Tax deducted at source from salaries is called:
- A. VAT
- B. PAYE
- C. CGT
- D. WHT
Answer: B
7. A person's total income minus allowable deductions gives:
- A. Gross income
- B. Taxable income
- C. Net pay
- D. Bonus
Answer: B
8. Tax evasion is:
- A. Legal
- B. Illegal
- C. Encouraged
- D. Optional
Answer: B
9. Consolidated Relief Allowance reduces:
- A. Gross income to taxable income
- B. Tax to zero
- C. Salary
- D. VAT
Answer: A
10. A self-employed person files taxes with the:
- A. FIRS only
- B. State Revenue Service
- C. Bank
- D. Court
Answer: B
11. Personal Income Tax (PIT) in Nigeria is administered by:
- A. FIRS only
- B. State Boards of Internal Revenue (residency-based)
- C. Local Governments
- D. CBN
Answer: B
AI Explanation
PITA assigns PIT administration to the SIRS of the taxpayer's place of residence; FIRS handles FCT residents and security agencies.
12. PAYE remittance by an employer is due on or before:
- A. 5th of the next month
- B. 10th of the next month
- C. 15th of the next month
- D. End of the next month
Answer: B
AI Explanation
PAYE deducted in a month must be remitted to the relevant SIRS by the 10th day of the following month.
13. Consolidated Relief Allowance (CRA) under PITA is:
- A. The higher of ₦200,000 or 1% of gross income, plus 20% of gross income
- B. 10% of gross income
- C. Fixed ₦100,000
- D. Pension contribution only
Answer: A
AI Explanation
CRA = (the higher of ₦200,000 or 1% of gross income) + 20% of gross income — granted before graduated rates apply.
14. Pension contributions to a registered Pension Fund Administrator are:
- A. Non-deductible
- B. Allowable deductions from gross income before tax
- C. Taxable income
- D. Withholding tax credits
Answer: B
AI Explanation
PRA 2014 contributions are deductible (with NHF, NHIS, life-insurance premiums) before computing chargeable income.
15. Compensation for loss of office under PITA (as amended) is exempt up to:
- A. ₦1 million
- B. ₦5 million
- C. ₦10 million
- D. Unlimited
Answer: C
AI Explanation
Per the Finance Act amendment, compensation for loss of office is exempt up to ₦10 million; excess is chargeable.
16. Deadline for filing individual annual tax returns under PITA:
- A. 31 December
- B. 31 March
- C. 30 June
- D. 31 January
Answer: B
AI Explanation
PITA requires individuals (especially self-employed/itinerant) to file annual returns by 31 March of the year following the assessment year.
17. Mr Bello earns ₦5,000,000 annual gross income. The 'higher of ₦200,000 or 1% of gross' part of his CRA is:
- A. ₦200,000
- B. ₦50,000
- C. ₦100,000
- D. ₦500,000
Answer: A
AI Explanation
1% of ₦5,000,000 = ₦50,000. Higher of ₦200,000 vs ₦50,000 = ₦200,000.
18. Continuing the above example, his total CRA is:
- A. ₦1,000,000
- B. ₦1,200,000
- C. ₦1,400,000
- D. ₦600,000
Answer: B
AI Explanation
CRA = ₦200,000 + (20% × ₦5,000,000) = ₦200,000 + ₦1,000,000 = ₦1,200,000.
19. Income from employment exercised partly in Nigeria and partly abroad is taxable in Nigeria on:
- A. Full amount regardless
- B. The portion attributable to duties exercised in Nigeria
- C. Only if employer is Nigerian
- D. Never
Answer: B
AI Explanation
Generally only the Nigerian portion (days worked in Nigeria) is taxable, subject to residency rules and any DTT.
20. Pension Reform Act 2014 minimum employee/employer pension contribution rates:
- A. 8% employee, 10% employer
- B. 10% employee, 8% employer
- C. 5% by each
- D. 15% employer alone
Answer: A
AI Explanation
PRA 2014: minimum 8% by employee, 10% by employer of (basic + housing + transport).
21. Personal use of an employer-provided car is:
- A. Always exempt
- B. A taxable benefit-in-kind
- C. Taxable only if luxury
- D. Treated as a loan
Answer: B
AI Explanation
Personal use of an employer-provided car is a taxable benefit-in-kind, valued under PITA's third schedule.
22. Withholding tax (WHT) on rent paid to an individual is generally:
- A. 5%
- B. 10%
- C. 15%
- D. 0%
Answer: B
AI Explanation
WHT on rent paid to individuals is 10% under prevailing Withholding Tax regulations.
23. A taxpayer aggrieved by a personal income tax assessment must FIRST file an objection within:
- A. 7 days
- B. 30 days
- C. 60 days
- D. 90 days
Answer: B
AI Explanation
PITA s.58 requires an objection in writing within 30 days of service of the assessment notice.
24. Leave bonus paid to an employee is:
- A. Exempt from PIT
- B. Chargeable to PIT
- C. Taxed at 50%
- D. Taxable only after retirement
Answer: B
AI Explanation
Leave bonus is taxable as part of employment income; only certain specific allowances are exempt under PITA.
25. Capital gains tax on disposal of personal-effect chattels:
- A. Always 10%
- B. Exempt for ≤ ₦1,000 per item; otherwise 10%
- C. Not applicable
- D. Always 30%
Answer: B
AI Explanation
Under CGTA, chattels disposed for ₦1,000 or less per item are exempt; otherwise CGT applies at 10%.
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