As private equity cements its role in funding Nigerian businesses, a critical question remains unanswered: how should carried interest, the performance-based reward earned by fund managers, actually be taxed?
Nigerian tax law has no provision written specifically for carried interest, which means its treatment depends entirely on how a fund is structured, as a Limited Partnership, Limited Liability Partnership, Limited Liability Company, or trust. With no settled statutory footing, the burden currently falls on precise drafting and informed structuring, but is legislative clarity on the horizon?
Our article on “Carried Interest in Nigerian Private Capital Funds: Tax Treatment, Clawback Enforceability and the Unresolved Questions” in Issue 05 of the Private Equity and Venture Capital Association Nigeria’s (PEVCA) LRC Bulletin unpacks how the Nigeria Tax Act 2025 applies across each fund structure, examines the thorny issue of clawback provisions, and lays out practical structuring strategies to manage that risk.
Read the full article here on pages 26–31.