Nigeria Police Trust Fund (Establishment) Act Introduces 0.005% Levy On The Net Profit Of Companies


Andersen Tax LP


On 24 June 2019, the Nigerian President signed the Nigeria Police Trust Fund (Establishment) Bill (“Police Trust Fund Act” or “the Act”) into law. The Act establishes the Nigeria Police Trust Fund (Trust Fund) to provide funds for, inter alia, the training and welfare of personnel of the Nigeria Police Force. The Act also states that the Trust Fund would consist of funds from a levy of 0.005% of the net profit of companies operating a business in Nigeria amongst other sources.


The Police Trust Fund Act aims to provide a legal framework for the management and control of the Police Trust Fund. The Trust Fund covers all personnel of the Nigeria Police Force including its auxiliary staff in Nigeria and abroad and the Trust Fund is to operate for a period of six years from the commencement of the Act, after which it would cease to exist unless extended for any further period by an Act of the National Assembly.

Section 5 of the Act outlines the purposes of the Trust Fund which includes training, overall improvement of personnel of the Nigeria Police Force in the discharge of their duties, purchase of equipment, machinery and books and the construction of police stations and living facilities for the Nigeria Police Force.

Section 4 of the Trust Fund Act lists the sources of funds as follows:

  • 0.5% of the total revenue accruing to the Federation Account;
  • a levy of 0.005% of the net profit of companies operating a business in Nigeria;
  • any take-off grant and special intervention fund as may be provided by the Federal, State or Local Government;
  • monies appropriated by the National Assembly in the budget to meet the objective of the Act;
  • aids, grants and assistance from international agencies, non-governmental organisations and the private sector;
  • grants, donations, endowments, bequests and gifts (whether of money or property) from any source;
  • money derived from the investment made by the Trust Fund.
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The Act also establishes a General Fund for the administration of the Trust Fund and establishes the “Nigeria Police Trust Fund Board of Trustee”, Executive Secretary and Implementation Committee with powers to administer the Trust Fund. Specifically, the “Board of Trustee” is empowered to make regulations to give full effect to the provisions of the Act subject to the prior approval of the President.

In addition, the Trust Fund is exempt from the payment of income tax on any income accruing from investments made by the Trust Fund or otherwise.


The Police Trust Fund is expected to be a special intervention fund to finance necessary expenditures of the Nigerian Police Force. However, we expect the “Board of Trustee” to issue Regulations that will outline specific administrative functions and the modality of disbursement of monies from the funds.

Given that the Act employs the phrase “companies operating the business in Nigeria”, it would appear that both Nigerian Companies and foreign companies carrying out specific projects/operations in Nigeria would be liable to the imposition of the 0.005% levy on companies. However, the Act does not stipulate any modality and timeline for such payments to be made and the appropriate Agency responsible for collection and enforcement of the levy. In addition, the Act does not stipulate any penalty for failure to pay the prescribed levy of 0.005%. Thus, the modality for application and enforcement of the levy is still uncertain.

Furthermore, the signed version of the Act does not stipulate any commencement date. Thus, we expect that the commencement date would be included when gazetted.

It is also hoped that the Board of Trustee would provide additional clarification via a Regulation.

We would continue to monitor developments in this regard.