|
|
|
COMPANIES INCOME TAX ACT
CAP. 60 L.F.N. 1990 ACT CAP. C21 L.F.N. 2004
SUBSIDIARY LEGISLATION:
DOUBLE
TAXATION RELIEF (BETWEEN THE FEDERAL REPUBLIC OF NIGERIA AND THE GOVERNMENT OF
THE KINGDOM OF BELGIUM ORDER S.I. 15 1997 COMPANIES INCOME TAX (RATES, ETC. OF TAX DEDUCTED AT SOURCE (WITHOLDING TAX) REGULATIONS S.1 10 1997
INCOME
TAX APPEALS (APPEAL COMMISSIONERS) RULES L.N. 169 of 1962[41]
COMPANIES INCOME TAX ACT 1979. No. 28.
An Act to consolidate the provisions of the
companies Income Tax Act 1961 and to make other provisions relating thereto.
Commencement. [See section 85]
PART I- ADMINISTRATION
Establishment and constitution of the Board
.1. (1) There shall continue to be a Board
of which the official name shall be the Federal Board of Inland Revenue(hereafter
in this Act referred to as the Board) whose operational arm shall be the
Federal Inland Revenue Service (hereafter in this Act referred to as the
Service)
(2) The Board shall comprise -
"(a) an Executive Chairman, who shall be a
person within the service experienced in taxation to be appointed by the
President
(b) the Directors and heads of department of the
service
(c) the officer from time to time holding or
acting in the post of Director with the responsibility for planning research
and statistics matters in the Federal Ministry of Finance
(d) a member of the board of the National Revenue
mobilization allocation and fiscal commission.
(e) a member from the Nigerian National Petroleum
Corporation not lower in rank than an Executive Director
(f) a Director from the national Planning
Commission
(g) a Director from the Department of customs and
Excise
(h) the Registrar General of the Corporate
Affairs Commission
(i) the Legal Adviser to the service
(3) Any seven members of the Board, of whom one
shall be the chairman or a Director of a Department within the service shall
constitute a quorum.
(4) the Secretary (who shall be an ex-officio
member shall be nominated by the board from within the service
(5) Notwithstanding that the Legal Adviser to the
Board is at any time a member of the Board, he may appear for and
represent the Board in his professional capacity
in any proceedings in which the Board is a party; and the Legal Adviser shall
not in such circumstances give evidence on behalf
of the Board.
(6) The Secretary shall summon a meeting of the
board whenever the business requiring its attention so warrants, or upon any
request of a member; and a majority decision of
the members on any matter obtained by him in written correspondence shall
be treated in all respects as though it were a
decision of the Board in actual meeting unless any member has requested the
submission of that matter to such meeting.
2. (1) There shall be a technical committee of
the board (hereafter in this Act referred to as the technical committee) which
shall comprise (a)
the Executive Chairman of the Board as Chairman. (b)
All the Directors and heads of department of the service (c) the Legal Adviser in the Federal Inland
Revenue Service (d)
the Secretary to the Board
(2) the technical
committee may co-opt from the service such staff as it may require for the
discharge of its functions
(3) the functions of the
technical committee shall be to (a)
consider all tax matters that require professional and technical expertise and
make recommendations to the board (b)
advise the board on all the powers and duties specifically listed in section 2
of this Act and in the first schedule to this Act and; (c)
attend to such other matters as may from time to time be referred to it by the
board.[1]
Powers and duties of the Board.
3. (1) The due administration of this Act and the
tax shall be under the care and management of the Board who may do all
such things as may be deemed necessary and
expedient for the assessment and collection of the tax and shall account for
all
amounts so collected in a manner to be prescribed
by the Minister.
(2) Wherever the Board shall consider it
necessary with respect to any tax or penalty due, the Board may acquire, hold
and
dispose of any property taken as security for or
in satisfaction of any such tax or penalty or of any judgement debt due in
respect of any such tax or penalty and shall
account for any such property and the proceeds of sale thereof in a manner to
be
prescribed by the Minister.
(3) The Board may sue and be sued in it official
name and, subject to an express provision under any subsidiary legislation or
otherwise, the Board may authorise any person to
accept service of any document to be sent, served upon or delivered to the
Board.
(4) The Board may by notice in the Federal
Gazette or in writing-
(a) authorise any person within or outside
on the Board other than the powers or duties
specified in the First Schedule, or to receive any notice or other document to
be
given or delivered to, or served upon, the Board
under or in consequence of this Act and any subsidiary legislation made
thereunder; and
(b) with the consent of the Minister, authorise
the Joint Tax Board to perform or exercise, on behalf of the Board, any power
or duty conferred on the Board including the
powers or duties specified in the First Schedule.
(5) In the exercise of the powers and duties
conferred upon it, the Board shall be subject to the authority, direction and
control
of the Minister and any written direction, order
or instruction given by him after consultation with the Chairman shall be
carried out by the Board: Provided that the
Minister shall not give any direction, order or instruction in respect of any
particular person which would have the effect of
requiring the Board to raise an additional assessment upon such person or to
increase or decrease any assessment made or to be
made or any penalty imposed or to imposed upon or any relief given or to
be given to or to defer the collection of any
tax, penalty or judgement debt due by such person, or which would have the
effect
of altering the normal course of any proceedings,
whether civil or criminal, relating either to the recovery of any tax or
penalty or to any offence relating to tax.
(6) Every claim, objection, appeal, representation
or the like made by any person under any provision of this Act or of any
subsidiary legislation made thereunder shall be
made in accordance with this Act and subsidiary legislation.
(7) In any claim or matter or upon any objection
or appeal under this Act or under any subsidiary legislation made thereunder,
any act, matter or thing done by or with the
authority of the Board, in pursuance of any provisions of this Act or
subsidiary
legislation made thereunder, shall not be thing
as not or was not proved to be in accordance with any direction, order or
instruction given by the Minister.
Signification and execution of powers, duties,
etc.
4.
(1) Anything required to be done by the Board, in
relation to the powers or duties specified in the First Schedule, may be
signified under the hand of the Chairman or of
the Secretary.
(2) Any authorization given by the Board under or
by virtue of this Act shall be signified under the hand of the Chairman
unless such authority is notified in the Federal Gazette.
(3) Subject to subsection (1) of this section,
any notice or other document to be given under this Act, or under any
subsidiary
legislation made thereunder, shall be valid if-
(a)it is signed by the Chairman or by any person
authorised by him; or
(b)such notice or document is printed and the
official name of the Board is duly printed or stamped thereon.
(4) Every notice, authorization or other document
purporting to be a notice, authorization or other document duly given and
signified, notified or bearing the official name
of the Board, in accordance with the provisions of this section, shall be
presumed to be so given and signified, notified,
or otherwise without further proof, until the contrary is shown.
Power to amend the First Schedule.
5.
The Minister may at an time by Order delete any
of the powers of duties specified in the First Schedule to this Act or
include therein additional powers or duties or
otherwise amend such Schedule or substitute a new Schedule therefor.
Official secrecy.
6.
(1) Every person having any official duty or
being employed in the administration of this Act shall regard and deal with all
documents, information, returns, assessment lists
and copies of such lists relating to the profits or items of the profits of any
company, as secret and confidential.
(2) Every person having possession of or control
over any documents, information, returns or assessment lists or copies of
such lists relating to the income or profits or
losses of any person, who at any time communicates or attempts to communicate
such information or anything contained in such
documents, returns, lists, or copies to any person-
(a)other than a person to whom he is authorised
by the Minister to communicate it; or
(b)otherwise than for the purposes of this Act or
of any enactment in Nigeria imposing tax on the income of persons other
than companies, shall be guilty of an offence
against this Act.
(3) Any proceedings for an offence against this
section may be taken by or in the name of the Board but not by any other
person except with the consent of the
Attorney-General of the Federation.
(4) No person appointed under or employed in
carrying out the provisions of this Act shall be required to produce in any
court
any return, document or assessment, or to divulge
or communicate to any court any matter or thing coming under his notice in
the performance of his duties under this Act
except as may be necessary for the purpose of carrying into effect the
provisions
of this Act, or in order to institute a
prosecution, or in the course of a prosecution for any offence committed in
relation to any
tax on income or profits in Nigeria.
(5) Where under any law in force in any
Commonwealth country provision is made for the allowance of relief from income
tax in respect of the payment of income tax in
Nigeria, the obligation as to secrecy imposed by this section shall not prevent
the disclosure to the authorised officers of the
Government in that of such facts as may be necessary to enable the proper
relief to be given in case where relief is
claimed from the tax in Nigeria or from income tax that country.
(6) Where any agreement or arrangement with any
other country with respect to relief for double taxation of income or profits
includes provisions for the exchange of
information with that country for the purpose of implementing that relief or
prevented
by this section shall not prevent the disclosure
of such information to the authorised officers of the Government of such
country.
(7) Notwithstanding anything contained in this
section, the Board may permit the Auditor-General of the Federation or any
officer duly authorised in that behalf by him to
such access to any records or documents as may be necessary for General or
any such officer shall be deemed to be a person
employed in carrying out the provisions of this Act for the purposes of this
section.
Forms.
7.
The Board may, from time to time, specify the
form of returns, claims, statements and notices under this Act.
Service and signature of notices. Cap I23.
8.
(1) Except where it is provided by this Act that
service shall be effected either personally or by registered post, the
provisions of section 26 of the Interpretation
Act (which related to service by post) shall apply to the service of a notice,
if
such notice is addressed in accordance with the
provisions of subsection (3) of this section.
(2) Where a notice is sent by registered post it
shall be deemed to have been served on the day succeeding the day on which
the addressee of the registered letter containing
the notice would have been informed in the ordinary course of events that
such registered letter is awaiting him at a post
office, if such notice is addressed in accordance with the provisions of
subsection (3) of this section:
Provided that a notice shall not be deemed to
have been served under this subsection if the addressee proves that no
notification, informing him of the fact that the
registered letter was a awaiting him at a post office, was left at the address
given on such registered letter.
(3) A notice to be served in accordance with
subsection (1) or (2) of this Act shall be addressed-
(a)in the case of a company incorporated in
Nigeria, to the registered office of the company or any other known address of
the company[2];
and
(b)in the case of a company incorporated outside
Nigeria either to the individual authorised to accept service of process under
the Companies and Allied Matters Act at the
address filed with the Registrar-General of companies, if any, or to the
registered
office of the company wherever it may be
situated; and
(c)in the case of an individual or body of
persons to the last known business or private address of such individual or
body of
persons.
(4) Without prejudice to sections 68 and 85(1)(c)
of this Act, in any case where service of any notice under this Act has
proved impossible the notice may be served by
being left at the appropriate office or address as determined under subsection
(3) of this section or by posting it at office or
address or by publishing it in one issue of the Federal Gazette.
(5) Any person who abstracts any officer of the
Board in the exercise of his function e under this Act or who uses violence on
such officer shall be guilty of an offence and
shall on conviction-
(a)in the of a first offence, be liable to
imprisonment for six months or to a fine of not less than N2,000 or sentenced
to
imprisonment and fine; and
(b)in the case of a second or subsequent offence
and in any case where violence is used on any such officer, be sentenced to
imprisonment for six months without the option of
a fine.
PART II-IMPOSITION OF TAX AND PROFITS CHARGEABLE
Charge of tax.
9.
(1) Subject to the provisions of this Act, the
tax shall, for each year of assessment, be payable at the rate specified in
subsection (1) of section 40 of this Act upon the
profits of company accruing in, derived from, brought into, or received in,
Nigeria in respect of-
(a)any trade or business for whatever period of
time such trade or business may have been carried on;
(b)rent or any premium arising from a right
granted or any other person for the use or occupation of any property; and
where
any payment on account of such a rent as is
mentioned in this paragraph is made before the expiration of the period to
which
it relates and is included for the purposes of
this paragraph in the profits to company, then, so much of the payment as
relates
to any period beginning with the date on which
the payment is made shall be treated for these purposes as accruing to the
company proportioned form day to day over the
last-mentioned period or over the five years beginning with that date,
whichever is the shorter;
(c)dividends, interest, royalties[3]
discounts, charges or annuities;
(d)any source of annual profits or gains not
falling within the preceding categories;
Cap. P8
(e)any amount deemed to be income or profits
under a provision of this Act or, with respect to any benefit arising from a
pension or provident fund, of the Personal Income
Tax Act;
(f)fees, dues and allowances (whenever paid) for
service rendered.
(g) any amount of profits or gains arising from
acquisition and disposal of short term money instruments like Federal
Government securities, treasury bills, treasury or savings certificates
debenture certificates or treasury bonds[4]
(2) For the purposes of this section, interest
shall be deemed to be derived from Nigeria if-
(a)there is a liability to payment of the
interest by a Nigeria company or a company in Nigeria regardless of where or in
what
form the payment is made, or
(b)the interest accrues to a foreign company or
person from a Nigerian company or a company in Nigeria regardless of whichever
way the interest may have accrued.
(3) In this section, "dividend"
means-
(a)in relation to company not being in the
process of being wound up or liquidated, any profits distributed, whether such
profits are of a capital natural or not,
including an amount equal to the nominal value of bonus shares, debentures or
securities
awarded to the shareholders, and
(b)in relation to company that in being would up
or liquidated, any profits distributed, whether in money or money's worth or
otherwise, other than those of a capital nature
earned before or during the winding-up or liquidation.
"Identification of a company.
10. The incorporation number of a company to
which the provisions of section 8 apply, shall serve as the identification
number of the company and shall be displayed by
the company on all business transactions with other companies and
individuals and on every document, statement,
returns, audited account and correspondence with Revenue Authorities,
including the Board of Customs and Excise,
Ministries and all Government agencies.[5]
Charge of tax on interest relation to foreign and
agricultural loans, and contain reliefs.
11.
(1) Notwithstanding any other provisions of this
Act but subject to the provisions of the following subsections, where
during any calendar year commencing on or after 1
January, 1971, any foreign loan of an amount (or of an aggregate
amount) which is not less than N150,000 is
granted by a foreign company to any person carrying on any trade, business,
profession or vocation in Nigeria for the
purposes of that trade, business, profession or vocation, then any interest
derived by
the foreign company from that loan (being an
interest which by virtue of sub-section 10 of this section derived or deemed to
be
derived from Nigeria) shall-
(a)if the loan is not repayable by the borrower
until after the expiration of a period of not less than ten years, commencing
from the date on which the loan is granted, be
exempt from tax;
(b)if the loan is not repayable by the borrower
until after the expiration of a period of less than ten years but not less than
five
years, commencing from the date on which the loan
is granted, be chargeable to tax for each relevant year of assessment at
half the rate of tax specified in section 40 of
this Act.
(2) If, in any case to which subsection (1) of
this section applies, any such event as is mentioned in subsection (3) of this
section occurs, no tax exemption or tax relief,
as the case may be, shall be granted or made under the said subsection (1) or,
if
any such exemption or relief has been granted or
made, it shall be withdrawn.
(3) The events referred to in subsection (2) of
this section are-
(a)in a case to which paragraph (a) of subsection
(1) of this section applies, the loan is repaid to the foreign company within a
period of less than eight years;
(b)in a case to which paragraph (b) of subsection
(1) of this section applies, the loan is repaid to the foreign company within a
period of less than four years.
(4) The President may by order direct that no tax
exemption or tax relief shall be made or granted under
this section in respect
of any foreign loan specified in the order or, if any such exemption or relief
has been granted or made, that it shall be withdrawn.
(5) All such additional assessments and
adjustments of assessments shall be made as may be necessary for or in
consequence
of the withdrawal of any exemption or relief under this
section, and may be so made at any time.
(6) Interest payable on any foreign loan granted
on or after 1st April , 1978 shall be exempt from tax as prescribed in Table I
in the Third Schedule to
this Act. (7)
Interest on any loan granted by a bank on or after 1st January 1977 to a
company- engaged
in (i)
agricultural trade or business, or (ii)
the fabrication of any local plant and machinery or (b)
as working capital for any cottage industry established by the company under
the Family Economic Advancement Programme, Shall
be exempted from tax, provided the moratorium is not less than eighteen months
and the rate of interest on the loan is not more than the base lending
rate at the time the loan was granted.
(8) For the purposes of subsection (7) of this
section, where a bank grants loan to a company, it shall disclose to the board
the following information: (a)
the amount of the loan (b)
the moratorium (c)
the date repayment is due to commence (d)
the amount of repayment, showing capital and interest and (e)
the full particulars of the recipient of the loan and its permanent address
(9) agricultural trade or
business, means any trade or business connected with
"foreign
company" means any company or corporation (other than a corporation sole)
established by or under any law in force in any territory or country outside
Nigeria;
12.
Any company entering into any agreement (whether
oral or written) in respect of any service under paragraph (f) of
section 9(1) of this Act
shall forthwith make a full disclosure to the Board in writing of the terms of
such agreement.
Nigerian companies.
13.
(1) The profits of a Nigerian company shall be
deemed to a accrue in Nigeria wherever they have arisen and whether or
not they have been brought into or received in
Nigeria.
(2) The profits of a company other than a Nigeria
company from any trade or business shall be deemed to be derived from
Nigeria (a)
if that company has a fixed base in Nigeria to the extent that the profit is
attributable to the fixed base (b)
if it does not have a fixed base in Nigeria but habitually operate a trade or
business through a person in Nigeria
authorized to conclude contracts on its behalf or on behalf of some
other companies controlled by it or which have controlling interest in it or
habitually maintains a stock of goods or
merchandise in Nigeria from which deliveries are regularly made by a person on
behalf of the company to the extent that the profit is attributable to business
or trade or activities carried on through that person (c)
if that trade or business or activities involve a single contract for surveys,
deliveries, installations or construction; the profit from that contract
(d) where the trade or business or activities is
between the company and another person controlled by it or which has a
controlling interest in it and conditions are made or
imposed between that company and such persons in
their commercial or financial relations which in the opinion of the board is
deemed to be artificial or fictitious, so much of the profits adjusted by the
board to reflect arm s length transaction
(3) for the purposes of subsection 2 of this
section a fixed base shall not include facilities used solely for the
(a) storage or
display of goods or merchandise
(b) facilities used solely for the
collection of information[6]
Companies engaged in shipping or air transport.
14.
(1) Where a company other than a Nigeria company
carries on the business of transport by sea or air, and any ship or
aircraft owned or chartered by it calls at any
port or airport in Nigeria, its profits or loss to be deemed to be derived from
Nigeria shall be the full profits or loss arising
from the carriage of passenger, mails, livestock or goods shipped, or loaded
into an aircraft, in Nigeria:
Provided that this subsection shall not apply to
passengers, mails livestock or goods which are brought to Nigeria solely for
transhipment or for transfer from one aircraft to
another or in either direction between an aircraft and a ship.
(2) For the purposes of the preceding subsection,
where the Board is satisfied that the taxation authority of any other country
computes and assesses on a basis not materially
different from that prescribed by this Act the profits of a company which
operates ships or aircraft, and that authority
certifies-
(a)the ratio of profits or loss, before any
allowance by way of depreciation, of an accounting period to the total sums
receivable in respect of the carriage of
passengers, mails, livestock or goods; and
(b)the ratio of allowances by way of depreciation
for the period to that same total, then the full profits or loss of that period
shall be taken to be that proportion of the total
sums receivable in respect of the carriage of passengers, mails, livestock or
goods shipped or loaded in Nigeria which is
produced by applying the first-mentioned ratio to that total, and in place of
any
allowances to be given under the amount produced
by applying the second-mention ratio to that same total.
(3) Where at time of assessment, the provisions
of subsection (2) of this section cannot for any reason be satisfactorily
applied, the profits to be deemed to be derived
from Nigeria may be computed on a fair percentage on the full sum receivable
in respect of the carriage of passengers, mails,
livestock and goods shipped or loaded in Nigeria:
Provided that where any company has been assessed
for any year by reference to such percentage, it shall be entitled to claim
at any time within six years after the end of
such year that its liability for that year be-computed on the basis provided by
subsection (2) of this section; and where such
claim has been made and a certificate has been produced to the satisfaction of
the Board as provided in that subsection, such
repayment of tax shall be made as may be necessary to give effect to this
proviso, save that, if the company fails to agree
with the Board as to the amount of the tax to be so re-computed and re-paid,
the Board shall give notice to the company of
refusal to admit the claim and the provisions of this Act with respect to
objections and appeals shall apply accordingly
with any necessary medications.
(4) For the purposes of this section, the tax
payable be any company for any year of assessment shall not be less than two
per
cent of the full sum receivable in respect of the
carriage of passengers, mails, livestock or goods shipped or loaded into an
aircraft in Nigeria.
Cable undertakings
15.
Where a company other than a Nigerian Company
carries on the business of transmission of messages by cable or by any
form of wireless apparatus, it shall be
assessable to tax as though it operates ships or craft, and the provisions of
the preceding
section shall apply mutatis mutandis to the
computation of its profits deemed to be derived from Nigeria as though the
transmission of messages to places outside
passengers, mails, livestock or goods in Nigeria.
Insurance companies.
16.
(1) Notwithstanding anything to the contrary
contained in this Act, it is hereby provided that-
(a)in the case of an insurance company, whether
proprietary or mutual, other than a life insurance company or a Nigeria
company, which carries on business through a
permanent establishment in Nigeria, the profits on which tax may be imposed
shall be ascertained by taking the gross premiums
and interest and other income receivable in Nigeria (less any reinsurance),
and deducting from the balance so arrived at, a
reserve for unexpired risks at the percentage adopted by the company in
relation to its operations as a whole for such
risks at the end of the period for which the profits are being ascertained, and
adding thereto, a reserve similarly calculated
for unexpired risks outstanding at the commencement of such period, and from
the net amount so arrived at deducting the actual
losses in Nigeria (less the amount recovered in respect thereof under
reinsurance), the agency expenses in Nigeria and
a fair proportion of the expenses of the head office of the company;
(b)in the case of a life insurance company, whether
proprietary or mutual, other than a Nigerian company, which carries on
business through a permanent establishment in
Nigeria, the profits on which tax may be imposed shall be the investment
income less the management expenses, including
commission:Provided that where the profits of such a company accrue in
part outside Nigeria, the profits shall be that
proportion of the total investment income of the company as the premiums
receivable in Nigeria bear to the total premiums
receivable, less the agency expenses in Nigeria and a fair proportion of the
expenses of the head office of the company:
Provided further that, for the purposes of the
foregoing proviso, in the case of such an insurance company having its head
office outside Nigeria, the Board may substitute
some basis other than that therein prescribed for ascertain the required
proportion of the total investment income:
Provided that any amount distributed in any form
as dividend from the actuarial revaluation of unexpired risks or from any
other revaluation shall be deemed to be a part of
the total profits of the company;
(c)in the case of an insurance company which is a
Nigerian company, the profits on which tax may imposed shall be
ascertained in accordance with the foregoing
provisions of this section as though the whole investment and premium income
of the company were received in Nigeria, and all
the expenses and other outgoings of the company were incurred in Nigeria.
(2) Not more than three months after an actuarial
revaluation of the unexpired risks or any other revaluation has taken place,
the company shall provide the Board full
particulars of the revaluation carried out.
(3) For the purposes of this section, the term
"permanent establishment" in relation to an insurance company, means
a branch,
management or other fixed place of business in
Nigeria, but does not include an agency in Nigeria unless the agent has, and
habitually exercise, a general authority to
negotiate and conclude contracts on behalf of such company.
(4) For the purposes of this section, references
to insurance company include, references to any insurer registered under or
pursuant to the Insurance Act.
(5) For the purposes of this Act where an insurance
company carries on life insurance business in conjunction with insurance
business of any other class the life insurance business shall be treated as a
separate business from any other class of insurance business carried on by the
company
"Authorised unit trust Sscheme Cap. I24
17‑(1)
Where under any, of the provisions of the Investments and Securities Act,
a unit trust scheme is established for the purpose of providing facilities for
the participation of the public, as beneficiaries
under a trust, in profits or income arising from acquisition, holding,
management or disposal of securities or any other property whatsoever, this Act
shall, in respect of the income arising to the trustees of an authorised unit
trust, have effect
(a) as if the trustees were a company
whose business consists mainly ill the making of investments and the principal
part of whose income is derived therefrom
(b) as if the rights of the unit holders were shares in the company ;
and
(c) as if so much of the income accruing to the trustees as is available
for payment to the unit holders were dividends on such shares,
and
reference in this Act to a company shall be construed in accordance with this
subsection.
(2) For the purpose of section 32 of this Act, the profits of an
authorised unit scheme, on which tax may be imposed, shall be ascertained by
taking the income accruing to the trustees from all sources of the investment
of the unit trust and deducting therefrom sums disbursed as management
expenses, including remuneration for the managers.
(3) Where the trustees of a unit trust receive a payment on which the
unit trust suffers tax by deduction (not being franked investment income the tax
thereon shall be set‑off against any income assessable on the trustees by
an assessment made for the year of assessment in which the receipt, on which
the tax deduction was made, to be taken into account in ascertaining the tax
payable by the unit trust for the year of assessment.
(4) The provisions of section 53 of this Act shall apply to a dividend
accruing to the trustees of a unit trust.
(5) So much (1 tile profit
accruing to the trustees of a unit trust as is available for payment to unit
holders or for investment shall be deemed to be dividends paid or payable by
the trustees to the unit holders in Proportion to their rights, and the
provisions of section 21 of the Personal Income Tax Act shall apply to a
dividend paid or payable to any member of an authorised unit trust.
(6) In this section authorised unit
trust" means as respect a year of assessment,
a
unit trust scheme that is authorised by the Commission under section 125 of the
Investments and Securities Act to carry on the business of dealing in unit
trust scheme;
unit trust scheme means any arrangement made for the purpose of providing facilities for the participation of the public as beneficiaries under a trust in
profits or income arising from the acquisition, holding management or disposal of securities or any
other property whatsoever
"unit
holder" means any investor, beneficiary or person who acquired units in a
unit trust scheme and who is entitled to a share of the investment subject to the trusts of a unit
trust scheme.
'trustee',
under a unit trust scheme means the
person in whom the property for the time
being subject to any trust created in pursuance of the scheme is or may be invested in
accordance with the terms of the trust.[7]
Profits of a company from certain dividends. Cap.
17.
18.
The profits of a company from a dividend received
from any other company shall be shall be
excluded from the profits of any other company which is a shareholder in such
company.
19 where a dividend is paid out as profit on which
no tax payable due to - (a)
no total profits or (b)
total profits which are less than the amount of dividend which is paid whether
or not the recipient of the dividend is a Nigerian company
is paid by a Nigerian company paying the dividend shall be charged to tax at
the rate prescribed in subsection 1
of section 40 of this Act
as if the dividend is the total profits of the company for the year of
assessment to which the accounts out of which the dividend is declared relates.
20.
In the case of a company which is neither a
Nigerian company nor engaged in a trade or business in Nigeria at any time during
a year of assessment-
(a)no tax shall be charged on it for that year in
respect of any dividend received by it from a Nigerian company apart from tax
withheld under section 80 of this Act;
(b)where any divided is paid out of profits on
which no tax is payable due to no total profits or total profits which are less
than the amount of dividend which is paid whether the recipient of the dividend
is a Nigerian company or not, the company paying the dividend shall be charged
to tax at the rate prescribed in subsection (1) of section 40 of this Act as if
such dividend
is the total profits of the company for the year of
assessment which relates to accounts out of which the dividend is declared;
(c)nothing in this Act shall confer on such
company or on the company paying the dividend, a right to repayment of tax paid
by reason of the provisions of this section.
Certain undistributed profits may be treated as
distributed.
21.
(1) Where it appears to the Board that a Nigerian
company controlled by not more than five persons, with a view to
reducing the aggregate of
the tax chargeable in Nigeria on the profits or income of the company and those
persons, has not
distributed to its shareholders as dividend, profits made in
any period for which accounts have been made up by such
company, which profits
could have been distributed without detriment to the company's business as it
existed at the end of
that period, it may direct that any such undistributed
profits of such period be treated as distributed.
(2) Any amount of profits treated as distributed
under the provisions of the foregoing subsection shall, for the purposes of
this
Act and any enactment in Nigeria imposing tax on the incomes
of persons other than companies, be deemed to be profits or
income from a dividend
accruing to those persons who are shareholders in the company in proportion to
their shares in the ordinary capital thereof on such day, amount of such
profits or income to be taken for assessment in the hands of each such person
shall be his due proportion thereof increased by such amount in respect of tax
deemed to be deducted at source, as the
Board may determine.
(3) Any direction by the Board under section
shall be made in writing and be served upon the company, and shall specify-
(a)the day to be taken for the purposes of the
preceding subsection;
(b)the net amount of those profits so deemed to
be distributed;
(c)the rate of tax deemed to be deducted, being
the rate prescribed in subsection (2) of section 80 of this Act;
(d)the gross amount which after deduction of tax
at the said rate leaves such net amount of those profits; and
(e)the net Nigerian rate of tax applicable to
those profits, being such rate as would have computed or agreed by the Board
under the provisions of subsection (3) of section 43 of this Act if those
profits had been distributed by the company as a
dividend.
(4) For the purposes of this section, the Board
may give notice to any company which it has reason to believe is controlled by
not more than five
persons requiring it to supply within such reasonable time limited in such
notice, full particulars of its
shareholders on any day.
(5) Any direction by the Board under this section
with respect to the profits of any accounting period of a company, shall be
made not later than two
years after the receipt by the Board of the duly audited accounts of the
company for that period.
(6) A company in respect of which any direction
is made under this section shall have a right of appeal in like manner as
though for the purposes of
Part X of this Act, such direction were an assessment.
Article transactions, etc.
22.
(1) Where the Board is of opinion that any
disposition is not in fact given effect to or that any transaction which
reduces
or would reduce the amount of any tax payable is artificial
or fictitious, it any disregard any such disposition or direct that
such adjustments shall be
made as respects liability to tax as it considers appropriate so as to
counteract the reduction liability
to tax affected, or
reduction which would otherwise be affected, by the transaction and any company
concerned shall be
assessable accordingly.
(2) For this purpose of this section-
(a)"disposition" includes any trust,
grant covenant, agreement or arrangement;
(b)transactions between persons one of whom
either has control over the other or, in the case of individuals, who are
related
to each other or between persons both of are related to each
other or between persons , shall be whom are controlled by some
other person, shall be
deemed to be artificial or fictitious if in the opinion of the Board those
transactions have not been made
on terms which might fairly have been expected to
have been made by persons engaged in the same or similar activities dealing
with one another at arm's length.
(3) A company in respect of which any direction
is made under this section shall have a right of appeal in like manner as
though for the purpose of
Part X of this Act such directions were an assessment.
Profits exempted.
23.
(1) There shall exempt from the tax-
(a)the profits of any company being a statutory
or registered friendly society, in so far as such profits are not derived from
a trade or business carried on by such society;
(b)the profits of any company being a
co-operative society registered under any enactment or law relating to
co-operative
societies, not being profits from any trade or business
carried on by that company other than co-operative activities solely
carried out with its
members or from any share or other interest possessed by that company in a
trade or business in Nigeria
carried on by some other persons or authority;
(c)the profits of any company engaged in
ecclesiastical, charitable or education activities of a public character in so
far such
profits are not derived from a trade or business carried on
by such company;
(d)the profits of any company formed for the
purpose of promoting sporting activities where such profits are wholly
expendable for such
purpose, subject to such conditions a the Board may prescribe;
Cap. T14.
(e)the profits of any company being a trade union
registered under the Trade Unions Act in so far as such profits are not derived
from a trade or business carried on by such trade union;
(f) dividend distributed by Unit Trust[8]
(g)the profits of any
company being a body corporate established by or under any Local Government Law
or Edict in force in any State in Nigeria;
(h)
the profits of any body corporate being a purchasing authority established by
an enactment and empowered to acquire any commodity for export from Nigeria
from the purchase and sale (whether for the purposes of export or otherwise) of
that commodity;
(i)
the profits of any company or any corporation established by the law of a State
for the purpose of fostering the economic development of that State, not being
profits derived from any trade or business carried on by that corporation or
from any share or other interest possessed by that corporation in a trade or
business in Nigeria carried on by some other person or authority;
(j)
any profits of a company other than a Nigerian company which, but for this
paragraph, would be chargeable to tax by reason solely of their being brought
into or received in Nigeria;
Cap.
F34
(k)
dividend, interest, rent, or royalty derived by a company from a country
outside Nigeria and brought into Nigeria through Government approved channels.
For the purpose of this subsection, "Government approved channels",
means the Central Bank of Nigeria, any bank or other corporate body appointed
by the Minister as authorised dealer under the Foreign Exchange (Monitoring and
Miscellaneous) Act or any enactment replacing that Act;
(l)
The interest on deposit accounts of a foreign non-resident company: provided
that the deposits into the account are transfers wholly of foreign currencies
to Nigeria on or after 1st January 1990 through Government approved channels;
(m)
The interest on foreign currency domiciliary account in Nigeria accruing on or
after 1st January 1990.
(n)
nothing in this section shall be construed to exempt from deduction at source,
the tax which a company making payments is to deduct under sections 78,79 or 80
of this Act, such that the provisions of sections 78,79 or 80 of this Act,
shall apply to a dividend, interest, rent or royalty which is a part of the
profits or income referred to in subsections (1) (a) to (f) and (1) (h) to (l)
of this section.
(o)
dividend received from small companies in the manufacturing sector in the first
five years of their operation;
(p)
dividend received from investments in wholly export oriented businesses;
(q)
the profits of any Nigerian company in respect of goods exported from Nigeria
provided that the proceeds from such export are repatriated to Nigeria and are
used exclusively for the purchase of raw materials, plant, equipment and spare
parts;
(r)
the profits of a company whose supplies are exclusively inputs to the
manufacturing of products for export provided that the exporter shall give a
certificate of purchase of the inputs of the exportable goods to the seller of
the supplies
Power to exempt.
(2) The President may exempt or order-
(a)any company or class of companies from all or
any of the
provisions of this Act; or
(b)from tax all or any profits of any company or
class of companies from any source, on any ground which appears to it
sufficient.
(3) The President may by order amend, add to or
repeal any exemption made by notice or order under the
provisions of subsection
(2) or (4) of section 9 of the Personal Income Tax Act in so far as it affects
a company, and, subject to the
foregoing the following notices and order, shall
continue in force for all purposes of this Act-
L.N. 220 of 1943.
(a)the Income Tax Exemption (Interest on Nigerian
Public Loans) Notice;
L.N. 85 of 1957.
(b)the Income Tax (Exemption) (Nigerian
Broadcasting Corporation) Order;
L.N. 111 of 1958.
(c)the Railway Loan (International Bank)
(Exemption of Interest) Notice.
PART III-ASCERTAINMENT OF PROFITS
Deductions allowed.
24. Save where the provisions of subsection (2)
or (3) of section 14 or 16 of this Act apply, for the purpose of ascertaining
the
profits or loss of any company of any period from any source
chargeable with tax under this Act, there shall be deduction all
expenses for that period
by that company wholly, exclusive, necessarily and reasonable incurred in the
production of those
production of those profits including, but without otherwise
expanding or limiting the generality of the foregoing-
(a)any sum payable by way of interest on any
money borrowed and employed as capital in acquiring the profits;
(b)rent for that period, and premiums the
liability for which was incurred during that period, in respect of land or
building occupied for the purposes of acquiring accommodation occupied by
employees of the company, to a maximum of 100 % of the basic salary of
employees[9]6
(c) in the case of any property-holding company- (i) expenses
attributable to the maintenance of the property, [1999 No. 98.] (ii) directors' remuneration,
which shall not exceed N1O,OOO per annum in respect of each director, and the
number of directors to be so remunerated shall in no case exceed three; [1996 No. 30.]
(d) any outlay or
expenses incurred during the year in respect of
(i)
salary, wages, or other remuneration paid to the senior staff and
executives
(ii)
cost to the company of any benefit or allowance provided for the senior
staff and executives
which
shall not exceed the limit of the amount prescribed by the collective agreement
between the company and the employees and approved by the Federal Ministry of
Employment Labour and Productivity and the productivity prices, and income
board as the case may be
Provided that in respect of residential accommodation the amount of
deduction allowed shall be the lesser of the amount of the annual basic salary
of the employee to whom the building or flat, as the case may be, is allocated
as residential accommodation and the amount specified under paragraph (b) (i)
or (b) (ii) of this subsection[10]
(e)any expenses incurred for repair of premises,
plant, machinery or fixtures employed in acquiring the profits, or for the
renewals, repair or
alteration of any implement, utensil or article so employed;
(f)bad debts incurred in the curse of a trade or
business proved to have become bad during the period for which the profits are
being ascertained, and doubtful debts to the
extent that they are respectively estimated to the satisfaction of the Board to
have
become bad during the said period notwithstanding
that such bad or doubtful debts were due and payable before the
commencement of the said period.
Provided that-
1961 No. 22.
(i)where in any period a deduction under this
paragraph is to be made as respects any particular debt, and a deduction has in
any period been allowed either under the
Companies Income Tax Act 1961 or this Act in respect of the same debt, the
appropriate reduction shall be made in the deduction
to be made for the period question,
(ii)all sums recovered during the said period on
account of amounts previously written off or allowed either under the
Companies Tax Act 1961 or this Act in respect of
bad or doubtful debts shall for the purposes of this Act be deemed to be
profits of the trade or business of that period,
(iii)it is proved to the satisfaction of the
Board that the debts in respect of which a deduction is claimed either were
included
as a receipt of the trade or business in the
profits of the year within which they were incurred, or were advances not
falling
within the provisions of the trade or business in
the profits of the year within which they were incurred, provision or were
advances, not falling within the Provisions of
paragraph (a) of section 23 of this Act made in the course of normal trading or
business operations;
Cap. P8
(g)any contribution to a pension, provident or
other retirement benefits fund, society or scheme approved by the Joint Tax
Board under the powers conferred upon it by
paragraph (g) of section 85 of the Personal Income Tax Act , subject to the
provisions of the fourth schedule to this Act and
to any conditions imposed by the Board; and any contribution other than a
penalty made under the provisions of any
enactment establishing a national provident fund
or other retirement benefits scheme for employees throughout Nigeria;
(h)in the case of the Nigeria Railway Corporation
such deductions as are allowed under the provisions of the Authorised
Deductions Nigerian Railway Corporation) Rules,
which Rules shall continue in force for all purposes of this Act;
(g)in the case of profits from a trade or
business, any expense or part thereof-
(i)the liability for which was incurred during
that period wholly, exclusively, necessarily and reasonably for the purposes of
such trade or business and which is not
specifically referable to any other period or periods, or
(ii)the liability for which was incurred during
any previous period wholly, exclusively, necessarily and reasonably for the
purpose of such trade or business and which is
specifically referable to the period of which the profits are being
ascertained;
(iii) the expenses proved to the satisfaction of
the board to have been incurred by the company on research and development for
the period including the amount of the levy paid by it to the National Science
Technology Fund[11]
(j)such other deduction as may be prescribed by
the Minister by any rule.
Deductible donations.
25.
(1) Subject to the provisions of this section and
notwithstanding anything contained in section 24 of this Act, for the
purpose of ascertaining the profits or loss of
any company for any period from any source chargeable with tax under this Act,
there shall be deducted the amount of any
donation made for that period by that company to any fund, body or institution
in
Nigeria to which this section applies.
(2) Without prejudice to section 27 of this Act,
it is hereby declared for the avoidance of doubt that the provisions of
subsection (1) of this section shall have effect
if, but only if, the donations are made out of the profits of the company, and
are
not expenditure of a capital nature.
(3) Except to such extent (if any) as the
National Council of Minister may by order in the Federal Gazette otherwise
direct, any deduction to be allowed to any company, under subsection (1) of
this section, for any year of assessment shall not exceed an amount which is
equal to ten per cent of the total deduction is made under this section.
(4) There shall be excluded from the sum
allowable as a deduction under this section, any outgoings and expenses which
are allowable as deductions under section 24 of this Act.
(5) This section shall apply to-
(a)the public funds;
(b)the statutory bodies and institutions;
(c)the ecclesiastical, charitable, benevolent,
educational and scientific institutions, established in Nigeria, which are
specified in the Fifth Schedule to this Act.
(6) The Minister may by order in the Federal Gazette
amend the said Schedule in any manner whatever:
Provided that no fund, body or institution shall
be added to that Schedule, in exercise of the powers conferred under the foregoing
provisions of this subsection, unless the fund is a public fund established in
Nigeria, or the body or institution is a statutory body or institution of a
public character, established in Nigeria.
(7) In this section references to donations made
by a company do not include references to any payments made by the company for
valuable consideration.
Deduction for Research and Development.
26.
(1) Notwithstanding anything contained in section
24 of this Act, for the purpose of ascertaining the profit or loss of any company
for any period from any source chargeable with tax under this Act, there shall
be deducted the amount of reserve made out of the profits of that period by
that company for research and development.
(2) The deduction to be allowed to any
company under subsection
(1) of this section for any year of assessment shall not exceed an amount which
is equal to ten per
cent
of the total profits of that company for
that year as ascertained before any deduction is made under this section and section
25 of this Act.
(3) Companies and other organisations engaged in
research and development activities for commercialisation shall be allowed 20%
investment tax credit on their qualifying expenditure for that purpose.
Deductions not allowed.
27.
Notwithstanding any other provision of this Act,
no deduction shall be allowed for the purpose of ascertaining the profits of
any company in respect of-
(a)capital repaid or withdrawn and an expenditure
of a capital nature;
(b)any sum recoverable under an insurance or
contract of indemnity;
(c)taxes on income or profits levied in Nigeria
or elsewhere , other than tax levied outside Nigeria on profits which are also chargeable
to tax in Nigeria where relief for the double taxation of those profits may not
be given under any other provision of this Act;
(d)any payment to a savings, widows and orphans,
pension, provident or other retirement benefit fund, society or scheme except
as permitted by paragraph (e) of section 24 of this Act;
(e)the depreciation of any asset;
(f)any sum reserved out of profits, except as
permitted by paragraph (d) of section 24 or 25 of this Act or as may be
estimated to the satisfaction of the Board, pending the determination of the
amount, to represent the amount of any expense deductible under the provisions
of that section the liability for which the income is being ascertained;
(g)any expense of any description incurred within
or outside Nigeria for the purpose of earning management fee unless poor approval
of a agreement giving rise to such management fee has been obtained from the
Minister;
(h)any expense whatever incurred within or
outside Nigeria as management fee under any agreement entered into after the commencement
of this section except to the extent as the Minister may allow;
(i)any expense of description incurred outside
Nigeria for and on behalf of any company except of a nature and to the extent as
the Board may consider allowable.
Waiver of refund of liability or expenses.
28.
When a deduction has been allowed to a company under
the provisions of section 24 or 25 of this Act in respect of any liability of,
or any expense incurred by that company and such liability is waived or
released or such expense is refunded to the company, in whole or in part, then
the amount of that liability or expense which is waived, released or refund as
the case may be shall be deemed to be profits of the company on the day on
which such waiver, release or refund was made or given.
PART IV - ASCERTAINMENT
OF ASSESSABLE PROFITS
Basis for computing assessable profits.
29. (1) Save as provided in this section, the
profits of any company for each year of assessment from such source of its
profits (hereinafter referred to as "the assessable profits") shall
be the profits of the year immediately preceding the year of assessment from
each such source:
Provided that in respect of any company which
makes up its accounts to any date between 1st January and 31st March, 1980, the
profits to be assessed to tax-
(a)in 1980 year of assessment, shall be the
profits of the period from the beginning of the accounting year to 31st
December, 1979; and
(b)in 1981 year of assessment, shall be the
profits for 1st January to the end of the company's accounting year in 1980.
(2) When the Board is satisfied that a company
has made or intends to make up account of its trade or business to some day other
than the 31st day of December, it may direct that the assembled profits of that
company shall be computed on the amount of the profits of the ending on that
day in the year preceding the year of assessment: Provided that where the assessable
profits of a company have been computed by reference to accounts made up to a
certain day, and such company fails to make up an account to the of the
corresponding day in the year following the assessable profits that company for
the year of assessment in which such failure occurs and for two years of
assessment next following shall be computed on such basis as the Board in its
discretion may decide.
New trade or business.
(3) The assessable profits of any company from
any trade or business for the year of assessment in which it commenced to carry
on such trade or business (or in the case of a company other than a Nigerian
company, for the year of assessment in which it commenced to carry on such
trade or business in Nigeria) and for the two following years of assessment
(which year are in this subsection respectively referred to as "the first
year", and "the third year") shall be ascertained in accordance
with the following provisions-
(a)for the first year the assessable profits
shall be the profits of that year;
(b)for the second year the
assessable profits shall,
unless such notice as hereinafter mentioned is given, be the amount of the
profits of one year from the date of the commencement of the trade or business
as determined for the purposes of paragraph (a) of this subsection;
(c)for the third year the assessable profits
shall, unless such notice as hereinafter mentioned is given, be computed in
accordance with subsection (1) of this section;
(d)a company shall be entitled, on giving notice
in writing to the Board within two years after the end of the second year, to require
that the assessable profits both for the second year and the third year (but
not for one or other only of those years) shall be profits of the respective
years of assessment: Provided that the company may, by notice in writing given
to the Board within twelve months after the end of third year revoke the
notice, and in such case, the assessable profits both for the second year and
the third year shall be computed as if the first notice had never been given Provided
that if the base period for the second or third year is the period of nine
months from 1st April to 31st December, 1980, the profits of that basis period
shall be grossed up as if they were the profits of twelve months;
(e)where such notice as aforesaid has been given
or revoked, such additional assessments or such reductions of assessments or repayments
of as shall be made as may necessary to give effect to paragraph (d) of this
subsection: Provided that if the company fails to agree with the Board as to
the amount of any reduction of an assessment or repayment of tax, the Board
shall give notice to the company of refusal to admit such reduction or
repayment and the provisions of Part X of this Act shall apply accordingly with
any necessary modifications as though such notice were an assessment.
Cessation of trade business.
(4) Where a company permanently cease to carry on
a trade or business (or in the case of a company other than a Nigerian company,
permanently ceases to carry on a trade or business in Nigeria) its assessable
profits therefrom shall be-
(a)as regard the year of assessment in which the
cessation occurs, the amount of the profits of that year;
(b)as regards the year of assessment preceding
that in which the cessation occurs, the amount of the profits as computed in accordance
with the foregoing subsections, or the amount of the profits such year, which
ever is the greater:
(c) Provided that where the profits of such year
is for a period of nine months from 1st April to 31st December, 1980, the
profits shall be grossed up as if they were the profits of twelve months; and
(c)the company shall not be deemed to derive
assessable
profits from such trade or business for the year of
assessment following that in which the cessation occurs.
(5) Where the
provisions of subsection
(1) of this section apply, such additional assessment or, on a claim being made
but the company for this purpose in writing, such reductions of assessments or
repayments of tax shall be made as may be necessary to give effect to these
provisions: Provided that, if the company fails to agree with the Board as to
the amount of any reduction of an assessment or repayment of tax, the Board
shall give notice to the company of refusal to admit the claim to such
reduction or repayment and the provisions of Part XI of the Act shall apply
accordingly with any necessary modifications as though such notice were an
assessment.
Apportionment of profits.
(6) Where in the case of any trade or business it
is necessary in order to arrive at the profits of any year of assessment or
other period to allocate or apportion to specific periods or loss of any period
for which accounts have been made up, or to aggregate any such profits or loss
or apportioned parts thereof, it shall be lawful to make such allocation,
apportionment or aggregation, and any apportionment under this section shall be
made in proportion to the number of days in the respective periods unless the
Board, having regard to any special circumstances, otherwise directs.
Receipts and payments after cessation of a trade
or business.
(7) Where after the date on which a company has
permanently ceased to carry on a trade or business (as determined for the purpose
of subsection (4) of this section) the company, its receivers or liquidators,
receive or pay any sum which would have been included in or deducted from the
profits of that trade or business if it had been deemed for all purposes of
this Act to have been received or paid prior to that date, such sum shall be
deemed for all purposes of this Act to have been received or paid by the
company on the last day before such cessation occurred.
Certain partnership. Cap P8.
(8) Where a company is engaged in a trade or
business in partnership with any other person in Nigeria, that trade or
business shall be deemed to constitute a separate source of profits, and the
assessable profits of the company from that source shall be determine the
provisions of the Personal Income Tax Act in like manner as would be the
assessable income of any individual partner in that partnership: Provided that,
with respect to any assets of such partnership, where any annual, initial or balancing
allowance or charge would fall to be given to or made upon the company for any
year under the provisions of the Fifth Schedule to that Act, if the company
were an individual partner in that partnership, such allowance or charge shall
be given or made as though due under the provisions of the Second Schedule and
in place of any other allowance or charge arising thereunder with respect to
the same asset.
Trade or business sold or transferred.
(9) Where a trade or business carried on by a
company is sold or transferred to a Nigerian company for the purposes of better
organisation of that trade or business or the transfer of its management to
Nigeria and any asset employed in such trade or business is sold or
transferred, if the Board is satisfied that one company has control over the
other or that both are controlled by some other person or are members of a
recognised group of companies, the Board may in its discretion direct that-
(a)the provisions of subsection (3) and (4) of
the section shall not apply to such trade or business; and
(b)for the purposes of the Second Schedule to
this Act, each such asset shall be deemed to have been sold for an amount equal
to the residue of the qualifying expenditure thereon on the day following such
sale or transfer; and
(c)the company acquiring each such asset shall
not be entitled to any initial allowance with respect to that asset under the
said Schedule and any allowances deemed to have been received by the vendor
company under the provisions of this paragraph- Provided that the Board in its
discretion-
(i) may require either company directly affected
by any such direction which is under consideration by the Board to guarantee or
give security, to the satisfaction of the board, for payment in full of all tax
due or to become due by the company selling or transferring such trade or
business, and
(ii) may impose such conditions as it sees fit on
either or both the companies directly affected, and in the event of failure by either
company to carry out or fulfil such guarantee or conditions, the Board may
revoke the direction and make all such additional assessments or repayments of
tax as may be necessary so as to give effect to such revocation; and for the
purposes of this subsection, reference to a trade of business shall include
references to any part thereof.
Trade or business transferred under Part II of
the Companies and Allied Matters Act.
Cap. C20
(10) Where, in pursuance of Chapter 3 of Part II
of the Companies and Allied Matters Act, a company (hereinafter in this subsection
referred to as "the re-constituted company") is incorporated under
that Act to carry on any trade or business previously carried on in Nigeria by
a foreign company and the assets employed in Nigeria by the foreign company in
that trade or business vest in the re-constituted company, then, if the Board
is satisfied that the trade or business carried on by the reconstituted company
immediately after the incorporation of that company under the Act is not
substantially different in nature from the trade or business previously carried
on in Nigeria by the foreign company, the following provisions of this subsection
shall have effect, that is-
(a)the provisions of subsections (3) and (4) of
this section shall not apply to the trade or business carried on by the
reconstituted company;
(b)for the purposes of the Second Schedule to
this Act, the assets so vested in the re-constituted company shall be deemed to
have been sold to it, on the day of the incorporation of that company, for an
amount equal to the residue of the qualifying expenditure thereon on the day
following the day on which the trade or business previously carried on in
Nigeria by the foreign company ceased; and
(c)the re-constituted company shall not be
entitled to any initial allowances as respects those assets and shall be deemed
to have received all allowances given to the foreign company in respect of
those assets under the Second Schedule to this Act and any allowances deemed to
have been received by the foreign company under the provisions of this
paragraph or subsection (9) of this section; and
1961 No. 22. Cap. 85 of 1958 Edition
(d)subject to subsection (11) of this section,
the amount of any loss incurred during any year of assessment by the foreign company
in the said trade or business previously carried on by it in Nigeria, being a
loss which has not been allowed against any assessable profits or income of
that company for any such year, under the provisions of this Act or the
corresponding provisions of the Companies Income Tax Act 1961 or the Income Tax
Act, shall be deemed to be a loss incurred by the reconstituted company in its
trade or business during the year of assessment in which its trade or business
commenced; and the amount of that loss shall, in accordance with section
31 of this Act, be deducted from the assessable profits of the
reconstituted company;
(e)no deduction shall be made under paragraph (d)
of this subsection in respect of any loss to which that paragraph relates- (i)except
to the extent, (if any) to which it is proved by the re-constituted company to
the satisfaction of the most senior officer in the Industrial Inspectorate
Division of the Federal Ministry of Industries (hereinafter after in this
subsection referred to as "the director") that the loss was not the
result of any damage or destruction caused by any military or other operations connected
with the civil war in which Nigeria was engaged and which ended on 15th January
1970:
Provided that the President
(ii)unless within three years after the
incorporation of the re-constituted company a claim for the deduction is lodged
by that company with the Director and a copy of the claim is forwarded by that
company to the Board; and
(f)any deduction to which paragraph (d) of this
subsection applies shall be made as afar as possible from the amount, if any, of
the assessable profits of the re-constituted company for the year of assessment
in which its trade or business commenced and, so far as it cannot be so made,
then from the amount of the assessable profits of the next year of assessment,
and so on but such deductions shall not be made against the profits of the
company after the fourth year from the commencement of such business, and in
this subsection "foreign company" means a company incorporated
outside Nigeria before 18th November, 1968, and having on that date an
established place of business in Nigeria.
Board may call for returns and information
relating to certain assets, etc, Cap. 59.
(11) For the purposes of subsection (9) and (10)
of this section, the Board may be notice require any person (including a company
to which any assets have vested in pursuance of Chapter 3 of Part II of the
Companies and Allied Matters Act) to prepare and deliver to the Board any
returns specified in the notice or any such information as the Board may
require about the assets; and it shall be the duty of that person to comply
with the requirements of any such notice within the period specified in the
notice, not being a period of less than twenty-one days from the service
thereof.
Cap. C1.
(12) No merger, take-over, transfer or
restructuring of the trade or business carried on by a company shall take place
without having obtained the Board's direction under sub-section (9) of this
section and clearance with respect to any tax that may be due and payable under
the Capital Gains Tax Act.
Board's power to assess and charge on turn-over
of trade or business
30.
(1) Notwithstanding section 40 of this Act,
where in respect of any trade or business carried on in Nigeria by any company (whether
or not part of the operations of the business are carried on outside Nigeria)
it appears to the Board that for any year or assessment, the trade or business
produces either no assessable profits or assessable profits which in the
opinion of the Board are less than might be expected to arise from that ride or
business or, as the case may be, the true amount of the assessable profits of
the company cannot be readily ascertained, the Board may, in respect of that
ride or business, and notwithstanding any other provisions of this Act if the
company is a-
(a)Nigerian company, assess and charge that
company for that year of assessment on such fair and reasonable percentage of the
turn-over of the trade or business as the Board may determine;
(b) if that company is a
company other than a Nigerian company and
I. that company has a fixed base of business in
Nigeria assess and charge that company for that year of assessment on such a
fair and reasonable percentage of that part of the turnover attributable to
that fixed base,
II. that company operates a trade or business
through a person authorised to conclude contracts on its behalf or on behalf of
some companies controlled by it or which have controlling interests in it or
habitually maintains a stock of goods or merchandise in Nigeria from which
deliveries are regularly made by a person on behalf of the company assess to
extent that the profit is attributable to the business or trade carried on
through that person
III. that company executes one single contract
involving surveys, deliveries,
installation or construction assess and charge that company on a fair and
reasonable for that year of assessment on such a fair and reasonable percentage
of that of the turnover of the contract and.
IV. the trade or business is between the company
and another person controlled by it or which has controlling interests in it
and conditions are imposed between the company and such person in their
commercial or financial relations which in the opinion of the board is deemed
to be artificial and fictitious, assess and charge on a fair and reasonable
percentage of that part of the turnover as may be determined by the board[12]
(2) The provisions of this Act as to notice of
assessment, additional assessment, appeal and other proceedings shall apply to an
assessment or additional assessment made under this section as they apply to an
assessment or additional assessment made under any other section of this Act.
PART V-ASCERTAINMENT OF TOTAL PROFITS
Total profits from all sources.
31.
(1) The total profits of any company for any year
of assessment shall be the amount of its total assessable profits from all sources
for that year together with any additions thereto to be made in accordance with
the provisions of the Second Schedule to this Act, less any deductions to be
made or allowed in accordance with the provisions of this section, section 32
and of the said Schedule (2) Subject to the provisions of subsection (4) of
this section, there shall be deducted-
(a)the amount of a loss which the Board is
satisfied has been incurred by the company in any trade or business during any
preceding year of assessment: Provided
that-
(i)in no circumstances shall the aggregate
deduction from assessable profits or income in respect of any such loss exceed
the amount of such loss, and
(ii)a deduction under this section for any
particular year of assessment shall not exceed the amount, if any, of the
assessable profits, included in the total profits for that year of assessment,
from the trade or business in which the loss was incurred and shall be made as
far as possible from the amount of such assessable profits of the first year of
assessment after that in which the loss was incurred and, so far as it cannot
be so made, then from such amount of such assessable profits of the next year
of assessment, and so on; but such deductions shall not be made against the
profit of the company after the fourth year from the year of commencement of
such business,
(iii)the period for carrying forward any loss in
subparagraph (ii) of this paragraph shall be limited to four years after which
period any such loss shall lapse;
(b)the amount of any loss which, under paragraph
(d) of subsection (10) of section 29 is deemed to be a loss incurred by the company
during the year of assessment in which its trade or business commenced, so
however that any deduction in respect of that loss shall be made as provided
under paragraph (f) of that subsection.
(3) The amount of any loss incurred by a company
engaged in an agricultural trade or business for the year assessment in which
it commenced to carry on such trade or business shall be deduction as far as
possible from the assessable profits of the first year of assessment after that
in which the loss was incurred and so far as it cannot be so made, then from
such amount of such assessable profits of the next year of assessment, and so
on (without limit as to time) until the loss has been completely set off
against the company's subsequent assessable profits.
(4) For the purposes of subsection (2) of this
section, the loss incurred during any year of assessment shall be computed,
where the Board so decides, by reference to the year ending on a day in such
year of assessment which would have been adopted under subsection (2) of
section 29 of this Act for the computation of assessable profits for the
following year of assessment if such profits had arisen.
(5) Where under the provisions of subsection (6)
of section 29 of this Act for the purpose of computing the profits of a period
the profits of which are assessable profits from that source for any year, it
has been necessary to allocate or apportion to specific periods which fall
within that whole period both profits and losses, then no deduction shall be
made under the provisions of subsection (2) of this section in respect of the
loss or apportioned part thereof referable to any such specific period except
to the extent such loss or part thereof exceeds the aggregate profits apportioned
to the remaining specific period or periods within that whole period.
Reconstruction investment allowance.
32.
(1), where-
a company has incurred an expenditure on plant
and equipment there shall be allowed to that company an investment allowance as
provided in subsection (2) of this section and shall be in addition to an
initial allowance under the second schedule to this Act
(2) The rate at which investment allowance is to
be allowed for the purpose of subsection (1) above shall be 10 per cent of the
actual expenditure incurred on such plant and equipment[13]
(3) Any provisions of the Second Schedule
applicable to an initial allowance shall also apply to an investment allowance under
this section, except that an investment allowance shall not be taken into
account in ascertaining the residue of qualifying expenditure, in respect of an
asset, for the purpose of the said Schedule.
(4) If in the case of any qualifying expenditure
incurred on the new asset, any such event as is mentioned in the next following
subsection occurs within a period of five years beginning with the date on
which the expenditure was incurred, no investment allowance shall be made in
respect of the expenditure or if such allowance has been made before the
occurrence of the event it shall be withdrawn.
(i) that the purpose of obtaining tax
allowances was the sole
(7) Any notice of a sale or transfer given under
subsection (6) of this section shall state the name and address of the person
to whom the sale or transfer is made.
(8) Where an asset in respect of which an
investment allowance has been made is sold or transferred it shall be the duty
of the purchaser or transferee, and of the personal representatives of any such
person on being required to do so by any officer duly authorised by the board
to give that officer all such information as he may require, and as they have
or can reasonably obtain, about any sale or transfer of the asset representing
the expenditure or about any other dealing with the asset.
(9) Any person who, without reasonable excuse,
fails to comply with this section shall be guilty of an offence and liable on
conviction to a penalty not exceeding N100 plus the amount of tax lost by the
granting of the investment allowance made in respect of the expenditure in
question.
(10) All such additional assessments and
adjustments of assessments shall be made as may be necessary in consequence of
the withdrawal of any investment allowance, and may be so made at any
time.
(11) For the purposes of this section-
"artificial or fictitious transactions"
has the same meaning as in section 22 of this
Act;
" chargeable purpose" means the purpose
of putting the assets to use such that profits accrue or are intended to accrue
therefrom and will be chargeable tax; "initial allowance" has the
same meaning as in the Second Schedule to this Act; "qualifying
expenditure" has the same meaning as in the Second Schedule of this Act.
"chargeable purpose" means the purpose
of putting the assets to use such that profits accrue or are intended to accrue
therefrom and
Rural investment allowance
Provided that where an allowance has been given
in pursuance of this section, no investment allowance under section 32 of this
Act shall be due or be given in respect of the same asset or in addition to the
allowance given under this section
(2) The rate of the rural investment allowance
for the purposes of this section shall be as follows:
(3) For the purposes of this section, the rural
investment allowance shall be made against the profits of the year in which the
date of completion of the said investment falls and the allowance or any fraction thereof shall not
be available for carry forward to any subsequent year whenever full effect
cannot be given to the allowance owing to there being no assessable profits or
assessable profits less than the total allowance for the year the investment
was made
[14]
Export Processing Zone allowance.
35. (1) A company which has incurred an
expenditure in its qualifying building and plant equipment in an approved
manufacturing
(2) A company granted capital allowance
under subsection (1) of this section shall not be entitled to an investment
allowance under this Act
(3). The, profit or gains of a 100% export
oriented undertaking established within and outside an
Export Free Zone shall be
exempt from tax for the first three consecutive assessment years provided that
-
(i) the undertaking is 100% export oriented,
(ii) the undertaking is not formed by splitting
or breaking up or reconstructing a business already in existence;
(iii) it manufactures, produces and exports
articles during the relevant year and the export proceeds form
75% of its turnover;
(iv) the undertaking is not formed by transfer of
machinery or plants, previously used for any purpose to
the new undertaking or
where machinery or plant previously used for any purpose is transferred does
not exceed 25% of the
total value of the machinery or the undertaking;
(v) the undertaking repatriates at least 75% of
the export earnings to Nigeria and places it in a domiciliary
account in any registered
and licenced bank in Nigeria.
(4) For the purpose of subsection (3) of this
section, only the tax written down value of the assets shall be carried
forward at the end of the
tax holidays.
Cap. N107 1996 No. 31
(5) In this section Export Processing Zone and ]
have the meanings assigned to them in the Nigerian Export Processing Zone Act
Mining of solid mineral
36. A new company going into the mining of
solid minerals shall be exempt from tax for the first three years of its
operation.
37. 25 per cent of incomes in convertible
currencies derived from tourists by a hotel shall be exempt from tax
provided that such income
is put in a reserved fund to be utilised within five years for the building
expansion of new hotels, conference centres and new facilities for the purpose
of tourism development.
38 (i) A company which engages wholly in the
fabrication of spare parts, tools and equipment for local consumption and
export shall be allowed 25% investment tax credit on its qualifying capital
expenditure;
(ii) A company which purchases a locally
manufactured plant, machinery or equipment for use in its business shall be
allowed 15% investment tax credit on such fixed asset bought for use.
Gas
utilisation (downstream operations)
39 (i) A company engaged in
gas utilisation (downstream operations) shall be granted the following
incentives, that is-
(c) accelerated capital allowances after the tax
free period, as follows, this is-
Rates of tax , deduction
of tax from dividends and relief for double taxation
40.(1) There shall be
levied and paid for each year of assessment in respect of the total profits of
every company tax at the rate of thirty kobo for every naira[16] (2) In addition
to any levy made pursuant to subsection (1) of this section, there shall, as
from the assessment year commencing on 1st January, 1989 be levied and
paid a special levy of fifteen per cent on excess profits of every company
including banks and for the purpose of this subsection, excess profits means
the difference between total profits as computed in accordance with section 27
of this Act and standard profits as calculated in accordance with the
provisions of subsection (3) of this section.
(12) For the purposes of subsection 11 of this
section a company shall not be allowed to claim the investment tax relief for
more than three years and the relief shall not be available to a company
already granted the pioneer status
42. Relief from the tax.
(1) In respect of every dividend paid by a
Nigerian company, being a dividend to which the proviso to section 18 applies,
the company shall issue to each of its shareholders a certificate setting out
the amount thereof which such shareholder is entitled and describing the
profits out of which the dividend is paid, and the company shall not be
entitled to deduct tax from any such dividend on payment thereof. (2)
For the purposes of this section, the net Nigerian rate of tax applicable to a
dividend shall be the rate computed or agreed by the Board in the following
manner
where the accounting period of a company out of the profits
of which a dividend is declared to be wholly payable coincides with any single
basis period of that company for a year of assessment (as determined under the
provisions of Part IV of this Act) the net Nigerian rate of tax applicable to
that dividend shall be computed by dividing the tax payable by the company for
that year of assessment after deduction of any relief given under the
provisions of section 44 or 46 by the distributable profits, as shown by the
accounts of the company, arising during that period, before deduction of any
tax but after deduction of any profits specified in subsection (1) of this
section;
in any other case, the net Nigerian rate of tax applicable to
the dividend shall be determined by the Board as may appear to it to be just
and equitable: Provided
that in no case shall the net Nigerian rate of tax applicable to a dividend
exceed the rate specified by section 40 of this Act for the year of assessment
in which payment of the dividend becomes due.
(3) Within fourteen days thereof every Nigerian
company shall supply full particulars to the Board of each dividend declared,
and on request of the Board shall supply a list of the shareholders to whom the
dividend is payable showing their respective shares therein.
(4) In the event that the net Nigerian rate of
tax applicable to a dividend has not agreed or computed by the
Board before the date on which payment of that
dividend becomes due, the certificate to be given for the purposes of
subsection (2) of this section shall so specify,
and no repayment out of tax deducted from that dividend shall be made to any
shareholder until that rate has been finally
determined.
(5) Nothing in this section shall be construed as
requiring a company to deduct tax from a dividend that is
not paid in money.
(6) Notwithstanding the foregoing provisions of
this section, every company paying dividend to its
shareholders shall pay tax at the prescribed rate
in subsection (1) of section 40 of this Act to the Board prior to the
payment of
the dividend. The tax so paid shall be a deposit
against the tax due from the company on the profits out of which the dividend
is paid:
Provided that the provisional tax paid under
section 59(1) of this Act shall be taken into account in
determining the amount of tax due under this
subsection.
Relief in respect of Common wealth income tax.
44.
(1) If any Nigerian company which has paid, by
deduction or otherwise, or is liable to pay, tax under
this Act for any year of assessment on any part
of its profits proves to the satisfaction of the Board that it has paid, by
deduction or otherwise, or is liable to pay,
Commonwealth income tax for that year in respect of the same part of its
profits, it
shall be entitled to relief from tax paid or
payable by it under this Act on that part of its profits at a rate thereon to
be
determined as follows-
(a)if the Commonwealth rate does not exceed
one-half of the rate of tax under this Act, the rate at
which relief is to be
given shall be the Commonwealth rate of tax;
(b)in any other case the rate at which relief is
to be given shall be half the rate for tax under this Act.
(2) If any company, other than Nigerian company
which had paid, by deduction or otherwise, or is liable to pay, tax under this
Act for any year of assessment on any part of its profits proves tot he
satisfaction of the Board that it has paid, by deduction or otherwise, or is
liable to pay, Commonwealth income tax for that year of assessment in respect
of the same part of its profits, it shall be entitled to relief from tax paid
or payable by it under this Act on that part of its profits at a rate thereon
to be determined as follows-
(a)if the Commonwealth rate of tax does not
exceed the rate of tax under this Act, the rate at which relief is to be given
shall be one-half of the Commonwealth rate of tax;
(b)if the Commonwealth rate of tax exceeds the
rate of tax under this Act, the rate at which relief is to be given shall be
equal to the
amount by which the rate of tax under this Act
exceeds one-half of the Commonwealth rate of tax.
(3) For the purposes of this
section-
"Commonwealth income tax" means any tax
on income or profits of companies charged under a law in force in any
country within the
Commonwealth or in the Republic of Ireland which provides for relief from tax
charged both in that country and Nigeria in a manner corresponding to the
relief granted by this section; "the rate of tax" under this Act of a
company for any year assessment means the rate determined by dividing the
amount of tax imposed for that year (before the deduction of any double
taxation relief granted by this Part) by the amount of the total profits of the
company for that year, and the Commonwealth rate of tax shall be determined in
a similar manner.
(4) Any claim for relief from tax for any year of
assessment under this section shall be made not
later than six years after the end of that year, and if the claim is admitted,
the
amount of the tax to be relieved shall be re-paid
out of the tax paid for that year of assessment or set-off against the tax
which
the company is liable to pay for that year of
assessment:
Provided that if the company fails to satisfy the
Board as to the
amount of the tax to be relieved, the Board shall
give notice of refusal to admit the claim and the provisions of Part XI shall
apply accordingly with any necessary
modifications as though such notice were an assessment.
Double taxation arrangements.
45.
(1) If the Minister by order declares, that
arrangements specified in the order have been made with the
Government of any country outside Nigerian with a
view to affording relief from double taxation in relation to tax imposed on
profits charged but this Act and any tax of a
similar character imposed by the laws of that country, and that it is expedient
that
those arrangements should have effect, the
arrangements shall have effect notwithstanding anything in this Act.
(2) On the making of an order under this section
with respect to arrangements made with the Government of any Commonwealth
country
or the Republic of Ireland, section 44 of this
Act shall cease to have ceased to have had effect as from the beginning of the
first year of assessment for which the
arrangements are expressed to apply except in so far as the arrangements
otherwise
provide.
(3) Where any arrangement have effect by virtue
of this section, any obligation as to secrecy in this Act shall not
prevent the disclosure to any authorised officer
of the Government with which the arrangements are made of such information
as is required to be disclosed under the
arrangements.
(4) The Minister may make rules for carrying out
the provisions of any arrangements having effect under this section.
(5) An order made under the provisions of
subsection (1) of this section may
include provisions for relief from tax for
periods commencing or terminating before the making of the order and provisions
as
to profits which are not themselves liable to
double taxation.
Method of calculating relief to be allowed for
double taxation.
46.
(1) The provisions of this section shall have
effect where, under arrangements having effect under
section 45 of this Act, foreign tax payable in
respect of any profits in the country with the Government of which the
arrangements are made is to be allowed as a
credit against tax payable in respect of those profits under this Act, and in
this
section, "foreign tax" means any tax
payable in that country which under the arrangements is to be so allowed.
(2) The amount of the tax chargeable in respect
of the profits which are liable to both tax and foreign tax
shall be reduced by the amount of the credit
admissible under the terms of the arrangement:
Provided that no credit shall be allowed to a
company for a year of assessment unless during some part of
that year it was a Nigerian company.
(3) The credit shall not exceed the amount which
would be produced by computing, in accordance with the
provisions of this Act, the amount of the profits
which are liable to both tax and foreign tax, and then charging that amount to
tax at a rate ascertained by dividing the tax
chargeable (before the deduction of any double taxation relief granted by this
Part
of the Act) on the total profits of the company
entitled to the profits by the amount of the total profits.
(4) With prejudice to the provisions of
subsection (3) of this section, the total credit to be allowed to a
company for a year of assessment for foreign tax
under all arrangements having effect under section 45 of this Act shall not
exceed the total tax payable by it for that year
of assessment.
(5) In computing the amount of the profits-
(a)no deduction shall be allowed in respect of
foreign tax (whether in respect of the same or any other
profits);
(b)where tax chargeable depends on the amount
received in Nigeria, the said amount shall be increased by
the appropriate amount of the foreign tax in
respect of the profits; and
(c)where the profits include a dividend and under
the arrangements foreign tax not chargeable directly or
but deduction in respect of the dividend is to be
taken into account in considering whether any, and if so what, credit is to be
given against tax in respect of the dividend, the
amount of the profits shall be increased by the amount of the foreign tax not
so chargeable which falls to be taken into
account in computing the amount of the credit, but notwithstanding anything in
the
preceding provisions of this subsection a
deduction shall be allowed of any amount by which the foreign tax in respect of
the
profits exceeds the credit thereof.
(6) Paragraphs (a) and (b) of subsection (5) of
this section, but not the remainder thereof shall, apply to the
computation of total profits for the purpose of
determining the rate mentioned in subsection (3) of this section, and shall
apply
thereto in relation to all profits in respect of
which credit falls to be given for foreign tax under arrangements for the time
being in force under section 45 of this Act.
(7) Where-
(a)the arrangements provide, in relation to
dividends of some classes but not in relation to dividends of
other classes, that foreign tax not chargeable
directly or by deduction in respect of dividends is to be taken into account in
considering whether any, and if so what, credit
is to be given against tax in respect of the dividends; and
(b)a dividend is paid which is not of a class in
relation to which the arrangement so provide, then, if the
dividend is paid to a company which controls,
directly or indirectly, not less than one-half of the voting power in the
company
paying the dividend, credit shall be allowed as
if the dividend were a dividend of a class in relation to which the
arrangements
so provide.
(8) Credit shall not be allowed under the
arrangements against tax chargeable in respect of the profits of a
company for any year of assessment if the company
elects that credit shall not be allowed in the case of those profits for that
year.
(9) Any claim for an allowance by way of credit
shall be made not later then two years after the end of
assessment, and in the event of any dispute as to
the amount allowable the claim shall be subject to objection and appeal in
like manner as an assessment.
(10) Where the amount of any credit given under
the arrangements is rendered excessive or insufficient by
reason of or elsewhere, nothing in this Act
limiting the time for the making of assessments or claims for relief shall
apply to
any assessment or claim to which the adjustment
gives rise, being an assessment or claim made not later than two years from
the time when all such assessments, adjustments
and other determinations have been made, whether in Nigeria or elsewhere,
as are material in determining whether any, and
if so what, credit falls to be given.
PART VIII-PERSONS CHARGEABLE, AGENTS
LIQUIDATORS. ETC.
Chargeability of tax.
47.
A company shall be chargeable to tax-
(a)in it own name; or
(b)in the name of any principal officer,
attorney, factor, agent or representative of the company in Nigeria in like
manner and to like amount as such company would be chargeable; or
(c)in the name of a receiver or liquidator, or of
any attorney, agent or representative thereof in Nigeria, in like manner and to
like amount as such company would have been chargeable if no receiver or
liquidator had been appointed.
Manager, etc., to be answerable.
48.
The principal officer or manager in Nigeria of
every company shall be answerable for doing all such
acts, matters and things as are required to be
done by virtue of this Act for the assessment of the company and payment of the
tax.
Power to appoint agent.
49.
(1) The Board may by notice in writing appoint
any person to be the agent of any company and the
person so declared the agent shall be agent of such
company for the purposes of this Act, and may be required to pay any tax
which is or will be payable by the company from
any moneys which may be held by him for, or due by or to become due by
him to, the company whose agent he has been
declared to be, and in default of such payment the tax shall be recoverable
from
him.
(2) For the purposes of this section, the Board
may require any person to give information as to any moneys, funds or
other assets which may be held by him for, or of
any moneys due by him to, any company.
(3) The provisions of this Act with respect to
objections and appeals shall apply to any notice given under this section as
though such notice were an assessment.
Indemnification of manager, etc. or agent.
50.
Every person answerable under this Act for the
payment of tax on behalf of a company may retain out of any money coming into
his hands on behalf of such company so much thereof as shall be sufficient to
pay such tax, and shall be and is hereby indemnified against any person
whatsoever for all payments made by him in pursuance and by virtue of this Act.
Company wound-up.
51.
Where a company is being wound-up, the liquidator
of the company to the shareholders thereof unless
he has made provisions for the payment in full of
any tax which may be found payable by the company, including any tax
deductions made by the company under any laws in
force in any part of Nigeria relating to the tax of individuals.
52.
(1) Whether or not a company is liable to pay tax for a year of assessment and
whether or not a return has been filed under section 55 of this Act a company
shall upon a notice from the Board file with the Board in the prescribed form, within such reasonable time
as may be stipulated in such notice a return of income for the year of
assessment designated therein together with the audited accounts and
information stipulated in subsection 1 (a) and (b) of section 55 of this Act.
(2). Every company whose turn over is one million
naira and above shall file self-assessment return within six months of
its accounting period provided that a company
whose turnover is below one million naira shall file a self-assessment return
as
from 1998 year of assessment.
Self assessment by companies of tax
payable
53.
Every company filing a return under section 58 of this Act or requested by
notice of the Board to file a return under section 59 of this Act shall-
(a)
In the return compute the tax payable by the company for the year of
assessment; and
(b)
forward with the tax return, evidence of direct payment of the whole or part of
tax due into a bank designated for the payment of tax.
[17]
54.
Notwithstanding anything to the contrary in any law an income tax assessment
under section 52, 53 or 55 of this Act
PART IX-RETURNS
Returns and provisional accounts.
55.
(1)
Every company, including
a
company granted exemption from incorporation,
shall, at least once a year without notice or demand therefrorn, file a
return with the Board in the prescribed
form and containing prescribed information together with the following
information
(a) the audited accounts, tax and capital allowances computations and a
true and correct statement in writing containing the amounts of
its profits from each and
every source computed in accordance with tile provisions of this Act and any
rules made thereunder ;
(b)
such particulars as may by such form of return be required for the purpose of
this Act and any rules made thereunder with respect to such profits,
allowances, reliefs, deductions or otherwise
as may be material under or by virtue of this Act and such rules[18].
(2) Such form of returns shall contain a
declaration which shall be signed by a director or secrecy of the
company that the return contains a true and
correct statement of the amount of its profits computed in respect of all
sources in
accordance with this Act and any rules made
thereunder and that the particulars given in such returns are true and
complete.
(3) Every company shall file with the Board its
audited accounts and returns
(a) in the case of a
company that has been in business for more than eighteen months, not more than
six months after the close of the company's accounting year;
(b) in the case of a
newly incorporated company, within eighteen months from the date of its
incorporation or not later than
six months after the end
of it's first accounting period as defined in section 29 (3) of this Act,
whichever is earlier;
(4) Any
company which fails to comply with the provisions of this section shall be
liable to pay as penalty an amount of-
(a) N2,500.00 in the
first month in which the failure occurs;
and
(b) N500.00 for each
subsequent month in which the failure continues.
(5) Where an offence
under this section by a company is proved to have been committed with the
consent or connivance of, or
to be attributed to any neglect on the part of, any
director, manager, secretary or other similar officers, servant or agent of the
company (or any person purporting to act in any such capacity) he as well as
the company shall be
deemed to be guilty of the offence and shall on
conviction be liable to a fine of N2,000 or imprisonment for six months, or
both.
(6) For the purpose of this section-
(a)every company shall designated a
representative who shall answer every query relating to the company's tax
matters;
(b)a person designated by a company pursuant to
paragraph (a) of this subsection shall be from members of the person
knowledgeable in the field of taxation as may be approved, from time to time,
by the Board.
56. A company which files return under section 53
of this Act within the time specified for filing of the return shall, if there
is no default in the payment arrangement, be granted a bonus one percent of the
tax payable.[19]
57. -(1) Every company operating in a Nigerian
stock exchange shall, not later than seven days after the end of
each calendar month, file with the Board or any
other relevant tax authority, a return in the prescribed form of its
transactions
during the preceding calendar month.
(2) A company filing a return shall, where its
transactions involve
(a) an offer in the primary market, state in the
return
(i) the type of offer
(ii) the services rendered,
(iii) the amount of tax deducted at source, and
(iv) the amount of value ,added tax payable;
(b) operations in the secondary market, state in
the return
(i) the number and value of transactions carried
out during the relevant calendar month,
(ii) the commission received or paid,
(iii) the amount of tax deducted at source, and
(iv) the amount of value added tax payable."[20]
Board may
call for further returns.
58.
The Board may give notice in writing to any
company when and as often as it thinks necessary
requiring it to deliver within a reasonable time
limited by such notice fuller or further returns respecting any matter as to
which a return is required or prescribed by this Act.
"Extension of period
of making returns.
59(1) A company may apply
in writing to the Board for an extension of the time within which to comply
with the provisions of sections 52, 55(3) and 60 of this Act, provided the
company
(a) makes the application
before the expiration of the time stipulated in those; sections for making the
returns; and
(b) shows good cause for
its inability to comply with those provisions.
(2) If the Board is
satisfied with the cause shown in an application under subsection (1) of this
section it may in writing grant the extension of time for making the
application to such time as it may consider appropriate.
[21]
Power to call for returns, books, documents and
information.
60.
(1) For the purpose of obtaining full information
in respect of the profits of any company, the Board
may give notice to any person requiring him,
within the time limited by such notice, to-
(a)complete and deliver to the Board, any return
specified in such notice;
(b)attend personally before an officer of the
Federal Inland Revenue Department for examination with
respect to any matter relating to such profit;
(c)produce of cause to be produced for
examination at the place and time stated in such notice, which time
may be from day-to-day for such period as the
Board may consider necessary, for the purpose of such examination any books,
documents, accounts and returns which the Board
may deem necessary; or
(d)give orally or in writing any other
information including name and address specified in such notice:
Provided that a person engaged in banking
including any person appointed to carry the Federal Savings
Bank Act into effect shall not be required to disclose
any information unless a disclosure is required in a letter signed by the
Chairman of the Board.
(2) For the purposes of paragraphs (a) to (d) of
subsection (1) of this section, the time limited by such
notice shall not be less than seven days from the
date of service of such notice, so however that an officer of the Board not
below the rank of a Chief Inspector of Taxes may
act in any of the cases stipulated in paragraph (a) or (c) or (d) of this
subsection, without giving any of the required
notices act out in this section.
(3) Any person engaged in banking in Nigeria who
contravenes the provisions of this section shall, in
respect of each offence, be liable on conviction
to a fine of N5,000 in the case of a body corporate, and in the case of an
individual to a fine of N500.
(4) Nothing in the foregoing provisions of this
section or in any other provisions of this Act shall be construed as precluding
the board from verifying by tax audit any matter relating to the profits of a
company or any matter relating to entries in any books documents accounts or
returns as the board may from time to time specify in any guidelines issued by
the board
Information to be delivered by bankers. Cap. F20.
61.
(1) Without prejudice to the foregoing section,
every person engaged in banking including any person
charged with the administration of the Federal
Saving Bank Act shall, prepare a return at the end of each month specifying the
names and addresses of new customers of the bank
and shall not later than the seventh day of the next following month
deliver the return to a tax authority of the area
where the bank operates, or where such customer is a company to the Federal
Board of Inland Revenue.
Cap. F20.
(2)
Subject to the foregoing provisions of this section, for the purposes of
obtaining relative to taxation,
the Board may give notice to any person including
a person engaged in banking business in Nigeria and any person charged
with the administration of the Federal Savings
Bank Act to provide within the time stipulated in the notice, information
including the name and address of any person
specified in the notice:
Cap. F20.
Provided that a person engaged in banking
business in Nigeria including any person charged with the
administration of the Federal Savings Bank Act
shall not be required to disclose any further information under this section
unless such disclosure is required by a notice
signed by the Chairman of the Board.
Return deemed to be furnished by the authority.
62.
A return, statement or form purporting to be
furnished under this Act by or on behalf of any person
shall for all purposes be deemed to have been
furnished by that person or by his authority, as the case may be, unless the
contrary is proved, and any person signing any
such return, statement or form shall be deemed to be cognisant of all matters
therein.
Books of account.
63.
(1) If a company chargeable with tax fails or
refuses to keep books or accounts which, in the opinion
of the Board, are adequate for the purposes of
income tax, the Board may by notice in writing require it to keep such records,
books and accounts as the Board considers to be
adequate in such form and in such language as may be specified in the said
notice and, subject to the provisions of the next
succeeding subsection, the company shall keep records, book sand accounts as
directed.
(2) Any direction of the Board made under this
section shall be subject to objection and appeal in like manner as an
assessment save that any decision of the Appeal
Commissioners thereon shall be final.
(3) On hearing such appeal the Appeal
Commissioners may confirm
or modify such direction.
Power to enter and search premises
64-(1) Where in respect of any trade or business
carried on in Nigeria by any company (whether or not part of the operations is
carried on outside Nigeria) the Board (a)
is satisfied that there is reasonable ground for suspecting that an offence
involving any form of total or partial non-disclosure of information or any
irregularity or offence in connection with, or in relation to tax, has been
committed and (b)
in the opinion of the Board, evidence of it is to be found in the premises,
registered office, any other office, or place of management of the company or
in the residence of the principal officer, factor agent or representatives of
the company, the
Board may authorise an officer of the Board to enter if necessary by force the
premises, registered office or place of management or the residence of the
principal officer, factor, or agent or representative of the company, if
necessary, by force, at any time from the date of such authorisation by the
Board and conduct a search.
(2) An authority to enter the premises,
registered office, place of management or residence of principal
officer, agent or factor of a company, to conduct
a search shall be in the form contained in sixth Schedule to this Act, and such
authority shall be sufficient warrant to search,
seize and remove any records and document found on such premises, office or
residence of principal officer, agent or factor
of the company, whether or not belonging to the company.
(3) On entering the premises with a warrant under
this section, the officer may seize and remove anything
whatsoever found therein which he has reasonable
cause to believe may be required for the purpose of arriving at a fair and
correct tax chargeable on the company or as
evidence for the purposes of proceedings in respect of such an offence as is
mentioned in subsection (1) of this section.
(4) For the purpose of this section, an officer
authorised by the Board to execute any warrant of search
under this section may call to his assistance a
police officer and it shall be the duty of the police officer when so required
to
aid and assist in the execution of any warrant to
obtain document for the purposes of the tax chargeable or to be charged on
the company and of the proceedings in respect of
the offence referred to in section (1) of this section.
(5) Where an entry to a premises has been made
with a warrant under this section and the officer making the
entry has seized anything under the authority of
the warrant, he shall if so required by a person showing himself either -
(a) to the principal officer of the company; or (b)
Any other person who has had the possession or custody of those things, provide
that principal officer or person with the list of items seized or surrendered.
(6) It
shall be the responsibility of any person on whom such warrant as mentioned in
subsection (2) of
this section is served to -
(a) cooperate fully with the person or persons
authorised to conduct a search by allowing easy access to the premises to be
searched and to the items or documents that may be required for the exercise;
(b) answer all questions and queries put to him
in the cause of the search;
(c) put in accessible position and facilitate the
removal of all items that may be required to assist the exercise.
(7) Any principal officer, agent, factor or
representative of the company on whom a warrant of search is served and who
refuses to cooperate with the person or persons authorised to search or does
anything tantamount to failure to cooperate or engages in act or acts resulting
in abuse, physical assault or similar misbehaviour shall be guilty of an
offence and on conviction be liable to a fine of N10,000 or to imprisonment of
not less than 6 months or to both such fine and imprisonment.
(8) Either prior to or during or after a warrant
of search is being or has been served or executed on a
principal officer, factor or agent of the
company, such principal officer, factor or agent may also be called upon to an
interview before an officer of the Board to
answer any query or question in connection with the activities of the company
as
would enable the Board to arrive at a fair and
correct tax liability of the company.".[22]
PART X-ASSESSMENTS
Board to make assessments.
65.
(1) The Board shall proceed to assess every
company chargeable with tax as soon as may be after the
expiration of the time allowed to such company
for the delivery of the audited accounts and return provided for in section 55
of this Act or otherwise as it appears to the
Board practicable so to do.
(2) Where a company has delivered audited
accounts and return, the Board may-
(a)accept the audited accounts and return and
make an assessment accordingly; or
(b)refuse to
accept the return and, to
the best of its judgments, determine the amount of the total profits of the
company and make an
assessment accordingly.
(3) Where a company has not delivered a return
and the Board is of the opinion that such company is
liable to pay tax, the
Board may, according to the best of its judgment, determine the amount of the
total profits of such
company and make an assessment accordingly, but such
assessment shall not affect any liability otherwise incurred by such company by
reason of its failure or neglect to deliver a return.
(4) Nothing in this section shall prevent the
Board from making
an assessment upon a company for any year before the
expiration of the time within which such company is required to deliver a
return or to give notice under the provisions of section 55 of this Act, if the
Board or any officer of the Federal
Inland Revenue Department
duly authorised by the Board considers such assessment to be necessary for any
reason of
urgency.
(5) In this section, the reference to a return
shall be construed as a reference to the accounts and return submitted
pursuant to section 55 of
this Act.
Additional assessments.
66.
(1) If the Board discovers or is of the opinion
at any time that any company liable to tax has not been
assessed or has been assessed at a less mount
than that which ought to have been charged, the Board may, within the year of
assessment or within six years after the
expiration thereof and as often as may be necessary, assess such company at
such
amount or additional amount, as ought to have
been charged, and the provision of this Act as to notice of assessment, appeal
and other proceedings shall apply to such
assessment or additional assessment and to the tax charged thereunder:
Provided that where any form for fraud, wilful
default or neglect has been committed by or on behalf of
any company in connection with any tax imposed
under this Act or under the companies Income Tax Act 1961 the Board may at
any time and as often as may be necessary, assess
such company at such amount or additional amount as may be necessary for
the purpose of making good any loss of tax
attributable to the fraud, wilful default of neglect.
(2) For the purpose of computing under subsection
(1) of this section the amount or the additional amount
which ought to have been charged, all relevant
facts consistent with the proviso to section 76 of this Act shall be taken into
account even though not known when any previous
assessment or additional assessment on the same company for the same
company for the same year was being made or could
have been made.
Lists of companies assessed.
67.
(1) The Board shall, as soon as possible, prepare
lists of companies assessed to tax.
(2) Such lists, herein called the assessment
lists, shall contain the names and the address of the companies
assessed to tax, the name and address of any
person in whose name any such company is chargeable, the amount of the total
profits of each company, the amount of tax
payable by it, and such other particulars as may be determined by the Board.
(3) Where complete copies of all notices of
assessment and of all notices amending assessments are filed
in the offices of the Board they shall constitute
the assessment lists for the purposes of this Act.
Service of notice of assessment.
68.
The Board shall cause to be served on or sent by
registered post to each company, or person in whose
name a company is chargeable, whose name appears
on the assessment lists, a notice stating the amount of the total profits,
the tax payable, the place at which such payment
should be made, and setting out the rights of the company under the next
following section.
Revision of assessment in case of objection.
69.
(1) If any company disputes the assessment it may
apply to the Board, by notice of objection in
writing, to review and to revise the assessment
made upon it.
(2) An application under subsection (1) shall
(a) be made within thirty days from the date of
service of the notice of assessment; and
(b) contain the ground of objection to the
assessment, that is -
the company giving the notice of objection to
furnish such particulars as the Board may deem necessary and to produce all
books or other documents relating to the profits
of the company, and may summon any person who may be able to give
evidence respecting the assessment to attend for
examination by an officer of the Federal Inland Revenue Department on oath
or otherwise.
(5) In the event of any company assessed, which
has objected to an assessment made upon it, agreeing
with the Board as to the amount at which it is
liable to be assessed, the assessment shall be amended accordingly, and notice
of the tax payable shall be served upon such
company:
Provided that if an applicant for revision under
the provisions of subsection (1) of this section fails to
agree with the Board the amount at which the
company is liable to be assessed, the Board shall give notice of refusal to
amend the assessment as desired by such company
and may revise the assessment to such amount as the Board may,
according to the best of its judgment, determine
and give notice of the notice of refusal to amend the revised assessment and,
wherever refusal to amend the revised assessment
and, wherever requisite, any reference in this Act to an assessment or to an
additional assessment shall be treated as a
reference to an assessment or to an additional assessment as revised under the
provisions of this proviso.
Errors and defects in assessment and notice.
70.(1) No assessment, warrant or other proceeding
purporting to be made in accordance with the
provisions of this Act shall be quashed to deemed
to be void or voidable, for want of form, or be affected by reason of a
mistake, defect or omission therein, if the same
is in substance and effect in conformity with or according to the intent and
meaning of this Act or any enactment amending the
same, and if the company assessed or intended to be assessed or affected
thereby is designated therein according to common
intent and understanding.
(2) An assessment shall not be impeached or
affected-
(a)by reason of a mistake therein as to-
(i)the name of a company liable or of a person in
whose name a company is chargeable, or
(ii)the
description of any
profits, or
(iii)the amount of tax charged;
(b)by reason of any variance between the
assessment and the
notice thereof: Provided that in cases of assessment the
notice thereof shall be duly served on the company intended to be charged or
the person in whose name such company is chargeable and such notice shall
contain, in substance and effect, the particulars on which the assessment is
made.
Establishment and constitution of body of Appeal
Commissioners.
71.
(1) The Minister may establish by notice in the
Federal Gazette, a body of Appeal Commissioners.
(2) The body of Appeal Commissioners shall
consist of not more than twelve persons, none of whom shall be a public officer
and one of whom shall be designated as chairman by the Minister.
(3) Each Appeal Commissioner-
(a)shall be appointed by notice in the Gazette by
the Minister from among persons appearing to him to have had experience and
shown capacity in the management of a substantial trade or business or the exercise
of the profession of law or accountancy in Nigeria;
(b)shall subject to the provisions of this
subsection hold office for a period of three years from the date of his
appointment;
(c)may at any time resign as an Appeal
Commissioner by notice in writing address to the Minister, and on the request
of the Minister he may continue to act as an Appeal Commissioner after the date
of his resignation, and sit at any further hearing in any case in which he has
already sat before to hear an appeal, until a final decision has been given
with respect to such appeal;
(d)shall cease to be an Appeal Commissioner upon
the Minister determining that his officer be vacant and upon notice of such of
such determination being published in the Federal Gazette; or upon the acceptance
of a political appointment[23]
(e)shall be paid such remuneration and allowances
as may be determined by the Minister with the approval of the National Council
of Ministers.
(4) Without prejudice to the generality of
paragraph (d) of subsection (3) of this section, if the Minister is satisfied
that an Appeal
Commissioner-
(a)has been absent from two consecutive meetings
of the body of Appeal Commissioners (other than any
meeting at which, by virtue of subsection (2) of
section 73 of this Act, he may not sit) without the written permission of the
Chairman of the Board; or
(b)in incapacitated by physical or illness; or
(c) has failed to make any declaration and give
notice
in accordance with subsection (2) of section 73 of this Act;
(d)has been convicted of a felony, or of an
offence under any
enactment in Nigeria imposing tax on income or profits,
the
Minister shall make a determination that his office as an Appeal
Commissioner is vacant.
(5) Where for any reason there is an insufficient
number of Appeal Commissioners to hear one or
more particular appeals, the Minister may make an
ad hoc appointment in writing, from among persons of the kind mentioned
in paragraph (a) of subsection (3) of this
section, of a person to be an Appeal Commissioner for the purpose of his
hearing
such appeal or appeals.
(6) The Minister shall designate a public officer
to be Secretary to the body of Appeal Commissioners
and the officer address of the Secretary shall be
published in the Federal Gazette.
1961 No. 22
(7) Those persons duly appointed as Appeal
commissioners and Secretary to the body of Appeal
Commissioners for the purposes of the Companies
Income Tax Act 1961, and holding office as such immediately before the
date of commencement of this Act shall be deemed
to have been appointed or designated, as the case may be, to like officers
under the provisions of this section, and the
Appeal Commissioners so deemed to be appointed shall constitute the body of
Appeal Commissioners on that date.
(8) the board of Appeal Commissioners shall
remain in office until a new board is sworn in
[24]
Appeals to Appeal Commissioners.
72.
(1) Any company which, being aggrieved by an
assessment made upon it, has failed to agree with
Board in the manner provided in subsection 5 of
section 69 of this Act, may appeal against the assessment to the Appeal
Commissioners
upon giving notice in writing to the Board and to
the Secretary to such Appeal Commissioners within thirty days after the date
of service upon such company of notice of the
refusal of the Board to amend the assessment as desired.
(2) A notice of an appeal against an assessment,
to be given under subsection (1) of this section shall specify the following
particulars-
(a)the official number of the assessment and the
year of assessment for which it was made;
(b) the amount of the tax charged by assessment;
(c)the amount of the total profits upon which
such tax was charged as appearing in the notice of assessment;
(d)the ate upon which the appellant was served with
notice of refusal by the Board to amend the assessment as desired;
(e)the precise grounds of appeal against the
assessment, but such grounds shall be limited to the grounds stated by the
appellant in
its notice of objection; and
(f)an address for service of any notices,
precepts or other documents to be given to the appellant by the Secretary to
the Appeal Commissioners:
Provided that at any time, the appellant may give
notice to such Secretary and to Board, by delivering the same or by registered
post, of a change of such address but any such notice shall not be valid until
delivered or received.
(3) All notices or documents to be given to the
Appeal Commissioners shall be addressed to the Secretary to the Appeal
Commissioner in writing at any time before the hearing of such appeal.
(4) A company may discontinue any appeal by it
under this section on giving notice to the Secretary to the Appeal
Commissioners in writing at any time before the hearing of such appeal.
(5) Notwithstanding that notice of appeal against
an assessment has been given by a company under this section, the
Board may revise the assessment in agreement with
the company, and upon notice of such agreement being given in writing
by the Board to the a Secretary to the Appeal
Commissioner at any time before the hearing of the appeal, such appeal shall be
treated as being discontinued.
(6) Upon the discontinuance of any appeal under
the provisions of this section, the amount or
revised amount of the assessment, as the case
many be deemed to have been agreed between the Board and the company
under the provisions of subsection (3) of section
69 of this Act.
Procedure before Appeal Commissioners etc.
73.
(1) As often as may be necessary, Appeal
Commissioners shall meet to hear appeals in any town in
which is situated an office of the Federal Inland
Revenue Department and, subject to the provisions of the next following
subsection, at any such meeting-
(a)any three or more Appeal Commissioners may
hear and decide an appeal; and
(b)the chairman of the body of Appeal
Commissioner shall preside and where the chairman is absent, the Appeal
Commissioners
present shall elect one of their number to be the
chairman for the meeting.
(2) An appeal Commissioner having a direct or
indirect financial interest in any company including the holding of or the
beneficial interest in any shares, stock or debentures issued by such company)
or being a relative of any person having any appeal by such company is pending
before the body of
Appeal Commissioners, declare such interest to
the other Commissioners and give notice to the Board in writing of such
interest relationship and interest and he shall not sit at any meeting for the
hearing of that appeal. The like provisions shall apply when the Appeal
Commissioner is a legal practitioner or an accountant, and the company is or
has been a client of that Appeal Commissioner.
(3) The Secretary to the Appeal Commissioners
shall give seven clear day's notice to the Board and to
the appellant of the date and place fixed for the
hearing of each appeal except in respect of any adjourned hearing for which
the Appeal Commissioners have fixed a date at
their previous hearing.
(4) All notices, precepts and documents, other
than
decisions of the Appeal Commissioners, may be
signified under the hand of the Secretary.
(5) All appeals before Appeal Commissioners shall
be held in camera.
(6) Every company so appealing shall be entitled
to be represented at the hearing of the appeal: Provided that, if the person
intended by the company to be its representative in any appeal is unable for
good cause
shown to attend the hearing thereof, the Appeal
Commissioners may adjourn the hearing for such reasonable time as they
think fit, or admit the appeal to be made by some
other person or by way of written statement.
(7) The onus of proving that the assessment
complained of is excessive shall be on the appellant.
(8) At the hearing of any appeal, if the
representative of the Board proves to the satisfaction of the Appeal
Commissioners or the court hearing the appeal in the first instance that-
(a)the appellant has (contrary to subsection (1)
of section 55 of this Act), for the year of assessment concerned failed to
prepare
deliver to the Board the statement mentioned in
that subsection;
(b)the appeal is frivolous or vexatious or is an
abuse of the
appeal process; or
(c)it is expedient to require the appellant to
pay an amount as security for prosecuting the appeal, the
Appeal Commissioners or, as the case may be, the
court may adjourn the hearing of the appeal to any subsequent day and
order the appellant to deposit with the Board,
before the day of the adjourned hearing an amount, on account of the tax
charge by the assessment under appeal, equal to
the tax charged upon the appellant for the preceding year of under appeal,
whichever is the lesser plus a sum equal to ten
per cent of the said deposit, and if the appellant fails to comply with the
order,
the assessment against which it has appealed
shall be confirmed and the appellant shall have further right of appeal
whatsoever with respect to that assessment.
(9) The Appeal commissioners may confirm, reduce,
increase or annul the assessment or make such order thereon as they see fit.
(10) Every decision of the Appeal commissioners
shall be recorded in writing by their chairman and a certified copy of such
decision shall be supplied to the appellant or the Board, by the Secretary,
upon a request made within three months of such decision.
(11)Where, upon the hearing of an appeal-
(a)no accounts, books or records relating to
profits were produced by or on behalf of the appellant; or
(b)such accounts, were so produced but the Appeal
Commissioner rejected the same on the ground that it had been shown to their
satisfaction that they were incomplete or unsatisfactory; or
(c)the appellant or his representative, at the
hearing of appeal, has neglected or refused
to comply with a precept delivered or sent to him
by the Secretary to the Appeal Commissioners without showing any
reasonable excuse; or
(d)the appellant or any person employed, whether
confidentially or otherwise, by the appellant or his
agent (other than his legal practitioner or
accountant acting for him in connection with his ability to tax) has refused to
answer
any question put to him by the Appeal
Commissioners, without showing any reasonably cause, the chairman of the Appeal
commissioners shall record particulars of the
same in his written decision.
(12) The Minister may make rules prescribing the
procedure to be followed in the conduct of
Appeals Commissioners.
Procedure following decision of Appeal
Commissioners.
74(1) Notice of the amount of the tax chargeable
under the assessment as determined by the Appeal
Commissioners shall be served by the Board upon
the company or upon the person in whose name such company is
chargeable.
(2) Where the tax chargeable upon a company for a
year of assessment in accordance with a decision of the
Appeal Commissioners does not exceed N400 no
further appeal by the company shall lie from that decision except with the
consent of the Board.
(3) An award or judgment of the Body of Appeal
Commissioners shall be enforced as if it were a
judgment of the Federal High Court upon
registration of a copy of such award of judgment with the Chief Registrar of
the
Federal High Court by the Party seeking to
enforce the award or judgment.
(4) Notwithstanding that an appeal is pending,
tax
shall be paid in accordance with the decision of
the Appeal Commissioners within one month of notification of the amount of
the tax payable in pursuance of subsection (1) of
this section.
Appeals to Court.
75.
(1) Subject to section 74 (2) of this Act, any
company which having appealed against an assessment
made upon it to the Appeal Commissioners under
section 72 of this Act is aggrieved by
the decision of such body may appeal
against such decision on point of law to the
Federal High Court upon giving notice in writing to the Secretary to the Appeal
Commissioners within thirty days after the date
on which such decision was given. Such notice shall set out all the grounds of
law on which the decision is being challenged.
(2) If the Board is dissatisfied with the
decision of the Appeal Commissioners, it may appeal against such
decision to the Federal High Court on a point of
law by giving notice in the Appeal Commissioners within thirty days after the
date on which such decision was given.
(3) Upon receipt of a notice of appeal under
subsection (1) or (2) of this section, the Secretary to the Appeal
Commissioners shall compile the record of proceedings and judgement before the
Appeal
Commissioners and staff cause the same to be
transmitted to the Chief Registrar of the Federal High Court along with all the
exhibits tendered at the hearing before the
Appeal Commissioners.
(4) The provisions of subsections (6), (7) and
(9) of section 73 of this Act and of subsection (1) of section 74 of this Act
shall apply to an appeal under this section with any necessary modifications.
(5) If upon the hearing of any appeal from a
decision of the Appeal Commissioners given under the provisions
of section 73 of this Act, a certified copy of
that decision is produced before the Federal High Court and such decision
contained a record by reference to-
(a)paragraph (a) of subsection (11) of that
section, the Federal High Court shall dismiss
such appeal; or
(b)paragraph (b) of subsection (11) of that
section, the Federal High Court may dismiss such appeal upon such
prima facie evidence, with respect to the
accounts, books or records having been complete or unsatisfactory, as to the
Federal
High Court may seem sufficient; or
(c)paragraph (c) or (d) of subsection (11) of
that section, the Federal High Court shall
dismiss such appeal unless it considers that the
cause of the neglect or refusal was reasonable.
(6) The cost of the appeal shall
be in the discretion of the judge hearing the
appeal and shall be a sum fixed by the judge.
(7) An appeal against the decision of
a judge shall lie to the court of Appeal-
(a)at the instance of the company, where the
decision of the judge is to the effect that the tax chargeable
upon the company for the relevant year of
assessment exceeds N1,000; and
(b)at the instance of or with the consent of the
Board, in any case: Provided that no costs shall be awarded
against the company in any appeal instituted by
the Board under this subsection unless such decision of the judge was to the
effect mentioned in paragraph (a) of this
subsection.
(8) The Chief Judge of the Federal High Court may
make rules providing for the procedure in respect of appeals made under this
section and until such rules are made the rules applicable in civil appeal case
from Magistrates Courts to the High Court of Lagos State shall apply with such
modifications as the Chief Judge of the Federal High Court may direct.
Assessments to be final and conclusive.
76.
Where no valid objection or appeal has been
lodged within the time limited by section 69, 72 or 75 of
this Act, as the case may be, against an
assessment as regards the amount of the total profits assessed thereby, or
where the
amount of total profits has been agreed to under
subsection (5) of the section 69 of
this Act, or where the amount of such total
profits has been determined on objection,
revision under the proviso to subsection (5) of section 69 of this Act, or on appeal,
the assessment as made, agreed to, revised or
determined on appeal, as the case may be, shall be final and conclusive for all
purposes of this Act as regards the amount of any
such total profits; and if the full amount of the tax in respect of any such
final and conclusive assessment is not paid
within the appropriate period or periods prescribed in this Act, the provisions
thereof relating to the recovery of tax, and to
any penalty under section 85 of this Act, shall apply to the collection and
recovery thereof subject only to the set-off of
the amount of any tax repayable under any claim, made under any provision of
this Act, which has been agreed to by the Board
or determined on any appeal against a refusal to admit any such claim:
Provided that-
(a)where an assessment has become final and
conclusive any tax overpaid shall be repaid;
(b)nothing in section 69 or in part XI of this Act shall prevent the Board
from making any assessment or
additional assessment for any year which does not
involve re-opening any issue, on the same facts, which has been
determined for that year of assessment under
subsection (3) of section 69 of this
Act by agreement or otherwise on appeal.
PART XII-COLLECTION,
RECOVERY AND PAYMENT OF TAX
Time within which tax (including provision tax)
is to be paid.
77.
(1) Notwithstanding any other provision of this
section, every company shall, not later than three
months from the commencement of each year of
assessment, pay provisional tax of an amount equal to the tax paid by such
company in the immediately proceeding year of
assessment in one lump sum
(2) Tax charged by any assessment which is not or
has not been the subject of an objection or appeal by
the company shall be payable (after the deduction
of any amount to be set-off for the purposes of collection under any
provision of this Act) at the place stated in the
notice of assessment within two months after service of such notice upon the
company
Provided that-
(a)if such period of two months expires before
the 14th day of December within the year of assessment for which the
tax has been charged and the aggregate tax to be set off and of any tax paid
for that year within such period then payment of any balance of such tax may be
made not later than that day[25]
(b)where the assessment notice is served on
the company within the approved period of payment of provisional tax, the tax
shall be paid within two months after the end of the approved period, but if
such period of two months expires before the 14th day of December
within the year of assessment for which the tax has been charged then the
payment of any balance of such tax may be made not later than that day[26]
(c)the Board in its discretion may extend the
time within which payment is to be made.
(3) Subject to the provisions of subsection (3)
section 74 of this Act, collection of
tax in any case where notice of an objection or appeal has been given by the
company shall remain in abeyance until such objection or appeal is determined,
saved that the company shall have paid the provisional tax as provided in
subsection (1) of this section or the tax not in dispute, whichever is higher.
(4) Upon the determination of an objection or
appeal, the Board shall serve upon the company a notice of the tax payable as
so determined, and that tax shall be payable within one month of the date of
service of such notice upon the company.[27]
Provided
that if such period of one month expires after the 14th day of
December within the year of assessment for which the tax has been charged and
the condition specified in proviso (a) to subsection (2) of this section are
satisfied with respect to the amount of tax charged as so determined, then any
balance of the tax payable may be paid not later than that day.
(5) A person filing self assessment shall pay the
tax due within two months from the date of filing the assessment in one lump
sum or such number of monthly instalments (not being more than six) as may be
approved by the board
(a) Provided further that where a request for
instalments expires after the 30th day of November within the year of
assessment
for each the tax have been charged, the payment
of any balance of such tax may be made not later than that day.
(b) provided further that where a request for
instalmental payment has been made, the request shall be accompanied with proof
of payment of the first instalment to the
designated bank.
(6) The provisions of subsection (1) of this
section shall not apply to a company that files a self assessment for the year
of assessment[28]
(7)
Where a company is required to file a return within the time allowed under
section 52 or specified under section 55 of this
Act
the tax as computed or shown in the return when filed shall be payable within
two months from the date of filing the return, and the
provisions
of section 85 of this Act shall apply to the collection of the tax.
(8)
Notwithstanding anything to the contrary in any laws, income payable under
section 52, 53 and 55 of this Act shall be
paid
to the Board in the currency in which the income giving rise to the tax derived
and paid to the company making the return
Deduction of tax from interest, etc.
Cap. P8
78.
(1) Where any interest other than interest on
inter-bank deposits or royalty becomes due from one
company to another
company or to any person to whom the provisions of the Personal Income Tax Act
apply, the company making such payment shall, at the date when payment is made
or credited, whichever first occurs deduct therefrom tax at the rate prescribed
in subsection (2) of this section and shall forthwith pay over to the Board the
amount so deduct.
(2) The rate at which tax is to be deducted in
this section shall be 10 per cent.
(3) For the purposes of this section, person
authorised to deduct tax includes government departments, parastatals,
statutory bodies,
institutions and other establishments approved
for the operation of Pay As You Earn system.
(4) The tax, when paid over to the Board, shall
be final tax due from a non-resident recipient of the payment.
(5) In accounting for the tax so deducted to the
Board, the company shall state in writing the following particulars, that is to
say-
(a)the gross amount of the interest or royalty;
(b)the name and address of the recipient; and
(c)the amount of tax being accounted for.
Deduction of tax on rent
79.
(1) Where any rent becomes due from or payable by
one company to another company or to any
person to whom the provisions of Personal Income
Tax Act apply, the company paying such rent shall, at the date when the rent is
paid or credited, whichever first occurs, deduct therefrom tax at the rate
prescribed under subsection (2) of this section and shall forthwith pay over to
the Board the amount so deducted.
(2)
The rate at which tax is
to be deducted under this section shall be 10 per cent.
(3) For the purposes of this section, persons
authorised to deduct tax include government departments, parastatals, statutory
bodies, institutions and other establishments approved for the operation of Pay
As You Earn system.
(4) The tax, when paid over to the Board, shall
be the final tax due for a non-resident recipient of the payment.
(5) In accounting for the tax so deducted to the
Board, the company shall state in writing the following particulars, that is to
say-
(a)the gross amount of the rent payable per
annum;
(b)the name and address of the recipient and the
period in respect of which such rent has been paid or credited;
(c)the address and accurate description of the
property concerned; and
(d)the amount of tax being accounted for.
(6) Any reference to rent in this section shall
be construed whenever necessary as including payments for the use or hire of
any equipment, payments for charter vessels, ship or aircraft and all such
other payments for the use or hire of movable and immovable property.
Deduction of tax from dividend.
80.
(1) Whereby dividend of such other distribution
becomes due from or payable by a Nigerian company to any other company or to
any person to whom the provision of the Personal Income Tax Act apply, the
company paying such dividend or making such distribution shall, at the date
when the amount is paid or credited whichever occurs first, deduct therefrom
tax at a rate prescribed under subsection (2) of this section, and shall
forthwith pay over to the Board the amount so deducted.
(2) The rate at which tax is to be deducted in
this section shall be ten per cent.
(3) Dividend received after the deduction of tax
shall be regarded as franked investment income of the company receiving the
dividend and shall not be charged to further tax as part of the profits of the
recipient company. However, where such income is redistributed and tax is to be accounted for
on the gross amount of distribution in accordance with subsection (1) of this
section, the company may off-set the
withholding tax which it has itself suffered on the same income.
(4) The tax, when paid over to the Board, shall
be the final tax due from a non-resident recipient of the
Payment.
(5) In accounting for the tax so deducted to the
Board, the company shall state in writing the following
particulars, that is to say-
(a)the gross amount of the dividend or such other
distribution;
(b)the name and address of the recipient;
(c)the accounting period or periods of the
company in respect of the profits out of which the dividend or distribution is
declared to be payable and the date on which payment is due; and
(d)the amount of tax so deducted.
Deduction of tax at source
81. (1) Income tax assessable on any company
whether or not an assessment has been made, shall, if the Board so directs, be
recoverable from any payments made by any person to such company.
(2) Any such direction may apply
to any person or class of persons specified in
such direction, either with respect to all companies or a company or class of
companies, liable to payment of income tax.
(3) Any direction under subsection (1) of this
section shall be in writing
addressed to the person or be published in the
Federal Gazette and shall specify the nature of payments and the rate at which
tax is to be deducted
(4) In determining the rate of tax to be applied
to any payments made to a company, the Board may take
into account-
(a)any assessable profits of that company for the
year arising from any other source chargeable to income tax
under this Act; and
(b)any income tax or arrears of tax payable by
that company for any of the six preceding years of
assessment.
(5) Income tax recovered under the provisions of
this section by deduction from payments made to a company
shall be set-off for the purposes of collection
against tax charged on such company by an assessment, but only to the
extent that the total of such deductions does not
exceed the amount of the assessment and provided the assessment is for the
period to which such payments relate under the provisions of section 29 of this
Act.[29]
(6) Every person required under any provisions of
this Act to make any deduction from payments made to any company shall account
to the board in such manner as the Board may prescribe for the deduction so
made.
(7) The Minister of Finance on the advice of the Board may make
Regulations for the carrying out of the provisions of this section.
Penalty for failure to deduct tax.
82. Any person who being obliged to deduct any tax
under section 78, 79, 80 or 81 of this Act fails to deduct or having deducted
fails to pay to the Board within thirty days from the date the amount was
deducted or the time to duty to deduct arose, shall be guilty of an offence and
shall be liable on conviction to a fine of 200% of the tax not withheld or not
remitted as the case may be
83. where
the person referred to under section 82 is a Ministry Department, parastatal, institution
or an agency of the Federal or a state Government or is a local Government the
board may authorize the Accountant-General of the Federation in writing to
deduct from the allocation of such Federal Ministry, Department, parastatal,
institution or agency of the state Government or local Government such amount
of tax deductible plus interest at the prevailing commercial rate
84. Income tax deducted under sections 78, 79, 80
and 81 of this Act shall be paid to the board in the currency in which such
deduction was made[30]
Addition for non-payment of tax and enforcement
of payment.
85.
(1) Subject to the provisions of subsection (3)
of this section, if any tax is not paid within the periods
prescribed in section 77 of this Act-
(a) a sum equal to ten percent per annum of the
amount of tax payable shall be added thereto, and the provisions of this Act
relating to the collection and recovery of tax shall apply to the collection
and recovery of such sum;
(b) the tax due shall carry interest at bank
lending rate from the date when the tax becomes payable until it is paid and
the provisions of this Act relating to collection and recovery of tax shall
apply to the collection and recovery of the interest.
(c) the Board shall serve a demand note upon the
company or person in whose name and company is chargeable, and if the payment
is not made within one month from the date of service of such demand note, the
Board may proceed to enforce payment as hereinafter provided;
(d)an
addition imposed under this subsection shall not be deemed to be part of the
tax paid for the purpose of claiming relief under any of the provisions of this
Act.
(2) Any company which without lawful
justification or excuse, the proof whereof shall lie on the
company, fails to pay the tax within the period
of one month prescribed in paragraph (b) of subsection (1) of this section,
shall be guilty of an offence against this Act.
(3) The Board may, for any good cause shown,
remit the whole or any part of the addition due under
subsection (1) of this section.
Power to distrain for non-payment of tax.
86.
(1) Without prejudice to any other power
conferred on the Board for the enforcement of payment of
tax due from a company, an assessment has become
final and conclusive and a demand note has, in accordance with the
provisions of this Part of this Act, been served
upon the company or upon the person in whose name the company is
chargeable, then, if payment of the tax is not
made within the time limited by the demand note, the Board may in the
prescribed form, for the purpose of enforcing
payment of the tax due-
(a)distrain the taxpayer by his goods or other
chattels, bond or other securities;
(b)distrains upon any land, premises, or place in
respect of which the taxpayer is the owner and,
subject to the following provisions of this
section, recover the amount of tax due by sale of anything so distrained.
(2) The authority to distrain under this section
shall be in the form contained in the Fourth schedule to this Act, and such
authority
shall be sufficient warrant and authority to levy
by distress the amount of tax due.
(3) For the purposes of levying any distress
under this section, any officer authorised in writing by the Board may execute
any warrant of distress and if necessary break
open any building or place in the day time for
the purpose of levying such distress, and he may call to his assistance any
police required to aid and assist in the
execution of any warrant of distress and in levying the distress.
(4) Things distrained
under this section may, at the cost of the
taxpayer, be kept for fourteen days and at the end of that time if the amount
due in
respect of the tax and the cost and charges of
and incidental to the distress are not paid, they may, subject to subsection
(6) of
this section, sold at any time thereafter.
(5) Out of the proceeds of any such sale there
shall, in the first place, be paid the cost
or charges of and incidental to the (sale and
keeping of the) distress, and disposal thereunder and in the next place the
amount
due in respect of tax; and the balance (if any)
shall be payable to the taxpayer upon demand being made by him or on his
behalf within one year of the date of the
sale.(6) Nothing in this section shall be construed so as to authorise the sale
of any
immovable property without an order of a High
Court, made on application in such form as may be prescribed by rules of
court.
Action for tax by Board and refusal of clearance
where tax is in default.
87.
(1) Tax may be sued for and recovered in a court
of competent jurisdiction at the place stated in the
notice of assessment as being the place at which
payment should be made, by the Board in its official name with full cost of
action from the company charged therewith as a
debt due to the Government of the Federation.
(2) For the purposes of this section, a court of
competent jurisdiction shall include a magistrate's court,
which court is hereby invested with the necessary
jurisdiction, provided that the amount claimed in any action does not
exceed the amount of the jurisdiction of the
magistrate concerned with respect to actions for debt.
(3) In any action brought such subsection (1) of
this section, the production of a certificate signed by any
person duly authorised by Chairman of the Board
giving the name and address of the defendant and the amount of tax due
shall be sufficient evidence of the amount so due
and sufficient authority for the court to give judgement for the said amount.
(4) In addition to any other powers of collection
and recovery provided in this Act, the Board may, where
the tax charged on the profits of any company
which carries on the business of shipowner or charterer has been in default for
more than three months, whether such company is
assessed directly or in the name of some other person, issue to the
Department of Customs and Excise or other
authority by whom clearance may be granted, a certificate containing the name
or
names of the said company and particulars of the
tax in default, and on receipt of such certificate, the said Department of
Customs and Excise or other authority shall be
empowered and is hereby required to refuse clearance from any port in Nigeria
to any ship owned wholly or partly or chartered
by such company until the said tax has been paid.
(5) No civil or criminal proceeding shall be
instituted or maintained against the said Department of
Customs and Excise or other authority in respect
of a refusal of clearance under this section, nor shall the fact that a ship is
detained under this section affect the liability
of the owner, charterer, or agent to pay harbour dues and charges for the
period
of detention.
88. (1) The court, before
which the Board has sued a company for non-payment, of tax, may issue a bench
warrant on a director or other officer of the company to compel the director or
officer to appear at every proceeding on the case until the final disposal of
the case.
(2) Where the Board has
obtained judgment against a company for non-payment of tax and the judgment
debt remains unpaid six months after the judgment, the court may, on the
application of the Board, issue a bench warrant on a director or other officer
of the company to compel the director or officer to appear in court and show
cause why the judgment debt has not been paid .
[31]
Remission of tax.
89.
The President may remit, wholly or in part, the
tax payable by any company if he is satisfied that it
will be just and equitable to do so.
Relief in respect of error or mistake.
90.
(1) If any company which has paid tax for any
year of assessment alleges that any assessment made
upon it for that year was excessive by reason of
some error or mistake in the return, statement or account made by or on
behalf of the company for the purposes of the
assessment, it may, at any time not later than six years after the end of the
year
of assessment within which the assessment was
made, make an application in writing to the Board for relief.
(2) On receiving any such application the Board
shall inquire into the matter and shall, subject to the provisions of this
section, give by way of repayment of tax such relief in respect of the error or
mistake as appears to be reasonable and just:
Provided that no relief shall be given under this
section in respect of an error or mistake as to the basis on which the
liability of the applicant ought to have been computed where the return,
statement or account was in fact made on the basis or in accordance with the
practice of the board generally prevailing at the time when the return,
statement or account was made.
(3) In determining any application under this
section, the Board shall have regard to all the relevant circumstances of the
case, and in particular shall consider whether the granting of relief would
result in the exclusion from charge to tax of any part of the profits of the
company, and for this purpose the Board may take into consideration the
liability of the company and assessments made upon it in respect of other
years.
(4) A determination by the Board under this
section shall be final and conclusive.
Repayment of tax.
91.
(1) Save as is otherwise in this Act expressly
provided, no claim for repayment of tax shall be allowed
unless it is made in writing within six years
after the end of the year of assessment to which it relates.
(2) The Board shall give a certificate of the
amount of any tax to be repaid under any of the provisions of
this Act or under any order of a court of
competent jurisdiction and upon the receipt of the certificate, the
Accountant-General of the Federation shall cause repayment to be made in
conformity therewith.
PART XIII-OFFENCES AND PENALTIES
Penalty for offences.
92.
(1) Any person guilty of
an offence against this Act or any person who contravenes or fails to comply
with any of the provisions of this Act or of any rule made thereunder for which
no other penalty is specifically provided, shall be liable on conviction to a
fine of (2)
Any person who
(a) fails to comply with the requirements of a notice served on
him under this Act; or
(b) without sufficient cause fails to attend in answer to a
notice or summons served on him under this Act or having attended fails to
answer any question lawfully put to him, shall
be guilty of an offence against this Act. Cap C41 (3)
Notwithstanding any of the provisions of the Criminal Procedure Act or any other applicable law, a magistrate may
dispense with personal attendance of the defendant if he pleads guilty in
writing or so pleads by a legal practitioner. (4)
In the case of failure by a company to comply with the requirements of any
notice given by the Board under the provisions of section 55 or 58 of this Act
for the purpose of the tax to be charged upon the company for any year of
assessment, the Board may, in lieu of the institution of proceedings under
subsection (2) of this section, impose a penalty upon the company of an amount
equal to the tax chargeable upon the company for the preceding year of
assessment: Provided
that
a.
written notice
of the penalty shall be served upon the company; and
b.
any amount of
such penalty remaining unpaid thirty days after service of such notice may be
sued for and recovered in a court of competent jurisdiction by the Board in its
official name with full costs of action from the company liable thereto as a
debt due to the Government of the Federation; and
c.
a certificate
signed by an officer of the Federal Inland Revenue Department duly authorised
by the Board setting out the name and address of such company, the date of
service of the said notice, and the amount of the penalty remaining unpaid,
shall be sufficient authority for the court to give judgment for that amount;
and
d.
the Board may
remit the whole or any part of such penalty, whether before or after judgment,
for any reason which appears to it to be adequate. 93. Penalty for making incorrect return. (1)
Every company which, and every other person who, without reasonable excuse
a.
makes an
incorrect return by omitting or understating any profits liable to tax under
this Act; or
b.
gives any
incorrect information in relation to any matter or thing affecting the
liability of any company to tax, shall
be guilty of an offence and shall be liable on conviction to a fine on (2)
No company or other person shall be liable to any penalty under this section
unless the complaint concerning such offence was made in the year of assessment
in respect of or during which the offence was committed or within six years
after the expiration thereof. (3)
The Board may compound any offence under this section, and may before judgment
stay or compound any proceedings thereunder. (4)
For the purposes of this section, a return shall be deemed to be made both by
the company and any other person signing such return on behalf of the company. 94. False statements and returns. (1)
Any person other than a company who
a.
for the
purpose of obtaining any deduction, set-off, relief or repayment in respect of
tax for any company, or who in any return, account or particulars made or
furnished with reference to tax, knowingly makes any false statement or false representation;
or
b.
aids, abets,
assists, counsels, incites or induces any other person
(i)
to make or deliver any false
return or statement under this Act, or
(ii)
to keep or prepare any false
accounts or particulars concerning any profits on which tax is payable under
this Act, or
unlawfully to refuse or neglect
to pay tax. shall
be guilty of an offence and shall be liable on conviction to a fine of (2)
The Board may compound any offence under this section and with the leave of the
court may before judgment stay or compound any proceedings thereunder. 95. Penalties for offences by authorised and
unauthorised persons. Any
person who
(a) being a person appointed for the due administration of
this Act or employed in connection with the assessment and collection of the
tax who
i.
demands from any company an
amount in excess of the authorised assessment of the tax, or
ii.
withholds for his own use or
otherwise any portion of the amount of the tax collected, or
iii.
renders a false return, whether
orally or in writing, of the amount of tax collected or received by him, or
iv.
defrauds any person, embezzles
any money, or otherwise uses his position as to deal wrongfully with the Board;
or
(b) not being authorised under this Act to do so, collects or
attempts to collect the tax under this Act, shall
be guilty of an offence and be liable on conviction to a fine of 96. Tax to be payable notwithstanding proceedings
for penalties. The
institution of proceedings for, or the imposition of a penalty, fine or term of
imprisonment under this Act shall not relieve any company from liability to
payment of any tax for which it is or may become liable. 97. Prosecution to be with the sanction of the
Board. No
prosecution in respect of an offence under section 93 94 or 95 may be commenced
except at the instance of or with the sanction of the Board. 98. Saving for criminal proceedings. The
provisions of this Act shall not affect any criminal proceedings under any
other enactment. 99.
Place of an offence. 78.
An offence under this Act shall be deemed to occur in the town where the
registered office of the company is situated or at such other place as the
Board may decide.
PART XIV-MISCELLANEOUS
Power to alter
rate
of tax, etc.
100.
The
President may, by order, revoke or vary for any year of assessment-
(a) the rate of tax
specified in section 40; and
(b) any rate of any
annual or initial allowance specified in the Second Schedule, save that with
respect to an initial
allowance any such variation may be expressed to apply to qualifying
expenditure incurred after the date of such order or some later specified date.
Tax clearance
certificate.
101.
(1)
Whenever the Board is of the opinion that tax assessed on profits or income of
a person has been fully paid or that tax is due
on such profits or
income, it shall issue a tax clearance certificate to the person within two
weeks of the demand for such certificate by that person or if not give reasons
for the denial.[32]
(2) Any Ministry,
department or agency of Government or any commercial bank either whom any
person has any dealing with
respect to any of the
transactions mentioned in subsection (4) of this section, shall demand from
such person a tax clearance certificate of three years immediately preceding
the current year of assessment.
(3) A tax clearance
certificate shall disclose in respect of the last three years of assessment-
(a) total profits or
chargeable income;
(b) tax payable;
(c) tax paid;
(d) tax outstanding or
alternatively a statement of the effect
that no tax is due.
(4) The provisions of
subsection (1) of this section shall apply in relation to the following that
is-
(a) application for
government loan for industry or business;
(b) registration for
motor vehicles;
(c) application for
firearms licence;
(d) application for
foreign exchange or exchange control
permission to remit
funds outside Nigeria;
(e) application for
certificate of occupancy;
(f) application for
award of contracts by Government and
its agencies and
registered companies;
(g) application for
trade licence;
(h) application for
approval of building plans;
(i) application for
transfer of real property;
(j) application for
import or export licence;
(k) application for
plot of land;
(l) application for
buying agent licence;
(m) application for
pools or gaming licence;
(n) application for
registration as a contractor;
(o) application for
distribution;
(p) stamping of
guarantor's form for Nigerian passport;
(q) application for
registration of a limited liability company
or of a business
names; and
(r) application for
allocation of market stalls.
(s) stamping of
statement of the nominal share capital of a company to be registered and any
increase in the registered share capital of any company
(t) stamping of
statement of the amount of loan capital
(5) An applicant for
exchange control permission to remit funds
to a non-resident recipient in
respect of income accruing from rent,
dividend, interest,
royalty, fees, or any other similar income shall be
required to produce a
tax clearance certificate to the effect that tax has
been paid on funds in
respect of which the application is sought or
that no tax is payable
whichever is the case.
(6) When a person who
has deducted any tax under any
provisions of this Act
fails to pay the tax so deducted to the
appropriate tax
authority, no tax clearance certificate may be issued to
that person even if he
has fully discharged his own tax liability under
this Act.
(7) where a person is
able to produce evidence that he suffered tax by deductions at source and that
the assessment year to which the tax relates falls within the period covered by
the tax clearance certificate such a person may not be denied a tax clearance
certificate. Provided that any balance of tax after credit has been given for
the tax so deducted has been fully paid[33]
Conduct of proceedings
102.
Any
officer of the Federal Inland Revenue Department duly authorised in writing in
that regard by the Chairman of the Board, may conduct any
prosecution or other
proceeding arising under this Act in any court in the Federation.
Power to pay reward.
103.
The
Board may with approval of the Commissioner, pay rewards to any person, not
being a person employed in the Federal
Inland Revenue Department in
respect of any information which may be of assistance to the Board in the
performance of its duties under this Act.
Repeals, transitional
provisions. etc. Cap. I23 1961 No. 22.
104.
(1)
Subject to this section and without prejudice to the
provisions of section
6 of the Interpretation Act, the Companies
Income Tax Act 1961
shall, except where other provisions are made in
that behalf in this
Act, cease to have effect with respect to tax on the
income or profits of
companies for all years of assessment beginning
after the 31st day of
March 1977.
(2) Anything made or
done, or having effect as if made or done,
before the date of
commencement of this Act under or pursuant or any
provision of the
Companies Income tax Act by the Board and having
any continuing or
resulting effect with respect to the taxation of the
profits of a company
or any matter connected therewith shall be
treated and for all
purposes shall have effect as if it were made or
done by the Board
under the corresponding provision of this Act.
(3) All rules, notices
or other subsidiary legislation made under
the Companies Income
Tax Act 1961 shall continue to have effect as
if made under the
corresponding provisions of this Act.
Cap. P8
1961.
No. 22.
(4) All references in
the Personal Income Tax Act and in any other enactment to provisions of
the Companies Income Tax Act 1961 shall be construed as references to the
corresponding provisions of this Act.
Interpretation
105.
(1)
In this Act, unless the context otherwise requires-
"Board"
means the Federal Board of Inland Revenue referred to in section 1 of this Act;
"company"
means any company or corporation (other than a corporation sole) established by
or under any law in force in Nigeria or
elsewhere;
"foreign
company" means any company or corporation (other than a corporation sole)
established by or under any law in force in any
territory or country
outside Nigeria;
"Joint Tax
Board" means the Joint Tax Board established under the provisions of any
enactment regulating the taxation of incomes of
person of other than
companies Nigeria;
"Minister"
means the Minister charged with responsibility for finance;
"Nigeria
company" means any company incorporated under the Companies and Allied
matters Act or any enactment replaced by that
Act;
"officers of the
board" includes any officer of the Federal Inland Revenue Service[34];
"persons"
includes a company or body of persons;
"tax" means
the tax impose by this Act;
"year of
assessment" means a period of twelve months commencing
on 1st January.
(2) Any reference in
this Act to any section Part or Schedule
not otherwise identified
is a reference to that section Part or Schedule
of this Act.
Short title and
application.
106.
(1)
This Act may be cited as the Companies Income Tax Act.
(2) This Act shall,
except where other provision is made in that behalf in this Act, apply in
respect of tax charged for the year of assessment commencing on 1st April 1977
and each succeeding year of assessment.
FIRST SCHEDULE
SECTION 3(4)
POWER OR DUTIES WHICH
THE BOARD MAY NOT DELEGATE EXCEPT TO THE JOINT TAX BOARD WITH THE CONSENT OF THE
MINSTER
1.
In
this Schedule, any reference to powers and duties shall include any part of any
power or duty of the Board either to make enquiries or to carry out or give
effect to any decision of the Board.
2.
Subject
to paragraph (b) of subsection (4) of section 3 of this Act, no power or duty
of the Board specified or imported in the following provision, namely-
(a) sections 1 (3), 7,
14 (2), 21, 22, 23 (1) (d), 29 (6), 29 (9), 42 (3), 42 (5), 43 (2) (b), 87 (4),
90, 91 (2), 93 (3) and 94 (2) of this Act, and in paragraphs 6 (2) and 18 of
Schedule 2 thereto;
(b) -section 13 of the
Industrial Development (Income Tax Relief) Act;
[Cap. 17.]
(c) the powers of the
Board to decide to take proceedings under subsection (3) of section 6 or to
take or sanction proceedings under section 97 of this Act;
(d) the power of the
Board to consider anything necessary under subsection (2) of section 3 of this
Act;
(e) the power of the
Board to authorise under subsections (3) and (4) of section 3 of this Act,
shall be delegated to any other person.
SECOND SCHEDULE
CAPITAL ALLOWANCE
ARRANGEMENT OF
PARAGRAPHS
Paragraph
1. Interpretation.
2. Provisions relating
to mining expenditure.
3. Owner and meaning
of relevant interest".
4. Sale of buildings.
5. Qualifying
industrial building expenditure.
6. Initial allowances.
7. Annual allowance.
8. Asset to be in use
at end of basis period.
9. Balancing
allowances.
10. Balancing charges.
11. Residue.
12. Meaning of
"disposal of".
13. Value of an asset.
14. Apportionment.
15. Part of an asset.
16. Extension of
meaning of "in use".
17. Exclusion of
certain expenditure.
18. Application to
lessors.
19. Asset used or
expenditure incurred partly for the purposes of a
trade or business.
20. Disposal without
change of ownership.
21. Meaning of
"allowances made".
22. Claims for
allowances.
23. Election in double
taxation cases.
24. Manner of making
allowances and charges.
TABLE I-INITIAL
ALLOWANCES
TABLE II-ANNUAL
ALLOWANCES
Interpretation. 1. (1)
For the purposes of this Schedule-
"basis period"
has the meaning assigned to it by the following
provisions of this
definition-
(a) in the case of
company to or on which any allowance of
charge falls to be
made in accordance with the
provisions of the
Schedule, its basis period for any year
of assessment is the
period by reference to the profits or
which any assessable
profits for that year fall to be
computed under the
provisions of section 29 of this Act;
(b) such profits mean
profits in respect of the trade or
business in which
there was used an asset in
connection with which
such allowance or charge falls to
be made:
Provided that, in the
case of any such trade or business-
(i) where two basis
period overlap, the period common to
both shall be deemed,
except for the purpose of making
an annual allowance,
to fall in the basis period ending at
the earlier date and
in no other basis period,
(ii) where two basis
periods coincide, they shall be treated
as overlapping, and
the basis period for the earlier year
of assessment shall be
treated as ending before the end
of the basis period
for the later year of assessment,
(iii) where there is
an interval between the end of the basis
period for one year of
assessment and the basis period
for the next year of
assessment, then unless the
second-mentioned year
of assessment is the year in
which, for the
purposes of subsection (4) of section 24,
such company
permanently ceases to carry on the trade
or business, the
interval shall be deemed to be part of
the second basis
period, and
(iv) where there is an
interval between the end of the basis
period for the year of
assessment preceding that in
which the trade or
business permanently ceases, for the
purposes of subsection
(4) of section 29, to be carried
on by such company and
the basis period for the year in
which it so ceases,
the interval shall be deemed to form
part of the first
basis period;
"concession"
includes a mining right and a mining lease;
"lease"
includes an agreement for a lease where the term to be
covered by the lease
has begun, any tenancy and any agreement for
the letting or hiring
out of an asset, but does not include a mortgage,
and the expression
"leasehold interest" shall be construed accordingly
and -
(a) where, with the
consent of the lessor, a lease of any
asset remains in
possession thereof after the
termination of the
lease without a new lease being
granted to him, that
lease shall be deemed for the
purposes of this
Schedule to continue so long as he
remains in possession
as aforesaid; and
(b) where, on the termination
of a lease of any asset, a new
lease of that asset is
granted to the lessee, the
provisions of this
Schedule shall have effect as if the
second lease were a
continuation of this first lease;
"qualifying
expenditure" means, subject to the express provision of this
Schedule, expenditure
incurred in a basis period which is -
(a) capital
expenditure (hereinafter called "qualifying plant
expenditure")
incurred on plant, machinery or fixtures;
(b) capital
expenditure (hereinafter called "qualifying
building
expenditure") incurred on the construction of
buildings, structures
of works of a permanent nature,
other than expenditure
which is included in subparagraph
(a) or (c) of this
definition;
(c) capital
expenditure (hereinafter called "qualifying mining
expenditure")
incurred in connection with, or in
preparation for, the
working of a mine, oil well or other
source of mineral
deposits of a wasting nature (other
than expenditure which
is included in sub-paragraph (a)
of this definition);
(d) capital expenditure
(hereinafter called "qualifying
planting
expenditure") incurred in connection with a
plantation-
(i) on the clearing of
land for planting,
(ii) on planting
(other than replanting),
(iii) on the
construction of any works or buildings
which are likely to be
of little or no value when
the source is no
longer worked or, where the
source is worked under
a concession, which are
likely to become
valueless when the concession
comes to an end to the
company working the
source immediately
before the concession
comes to an end.
(iv) on the
acquisition of, or of rights in or over, the
deposits or on the
purchase of information
relating to the
existing and extent of the deposits,
(v) on searching for
or on discovering and testing
deposits, or winning
access thereto;
(e) and for the
purposes of this definition, where-
(i) expenditure is
incurred for the purposes of a
trade or business by a
company about to carry
on such trade or
business, and
(ii) that expenditure
is incurred in respect of an
asset owned by that
company if that expenditure
would have fallen to
be treated as qualifying
expenditure if it had
been incurred by that
company on the first
day on which it carries on
that trade or
business,
that expenditure shall
be deemed to be qualifying
expenditure incurred
by it on that day;
(f) capital
expenditure, that is, qualifying research and
development
expenditure, incurred on equipment and
facilities, patent,
licences, secret formula or process or
for information
concerning industrial commercial or
scientific process;
technical feasibility of products or
processes and
purchases, searching for and
discovering and
testing products or process for future
market or use; and
such other similar cost which has not
brought into existence
any asset;
(g) capital expenditure,
that is, qualifying agricultural
expenditure, incurred
on plant in use in agricultural
trades and businesses
within the meaning of section 11
of this Act;
(h) capital
expenditure, that is, qualifying public transportation motor vehicle
expenditure, incurred on a
fleet of buses of not
less than three used for public transportation;
(i) capital
expenditure (hereafter called qualifying public transportation (inter-city) new
mass transit coach expenditure incurred on new mass transit coach of 25 seats
and above operated by a recognized corporate private establishment[35]
"trade or
business" means a trade or business or that part of a trade or business
the profits of which are assessable under this Act.
Application of capital
allowances to assets acquired under hire purchase agreement, etc.
(2) This Schedule
shall apply in relation to any asset acquired
by any hirer under a
hire-purchase agreement, the terms of which
provide for the use
and ultimate acquisition of the asset by the hirer,
as it applied to an
asset acquired by any owner of an asset for the
purposes of his trade
or business, but shall so apply subject to the
following
modifications, that is to say-
(a) the qualifying
expenditure within the meaning of subparagraph
(1)(i) of paragraph 1
of this Schedule shall,
in relation to any
asset so acquired under that
agreement, be limited
to the amount of the instalment
paid by the hirer
during his basis period (within the
meaning of those
provisions) excluding in the
computation of such
qualifying expenditure any interest
paid under the
agreement;
(b) any reference in
the provisions as aforesaid to any
owner of any asset
shall be construed as including a
reference to a hirer
under the hire-purchase agreement
and as excluding a
reference to the person letting the
goods to the hirer
under the agreement.
Provisions relating to
mining expenditure.
2.
(1)
For purposes of this Schedule, where-
(a) qualifying mining
expenditure has been incurred on the
purchase of
information relating to the existence and
extent of the deposits
or on searching for or on
discovering and
testing deposits or winning access
thereto and such
expenditure has been incurred for the
purposes of a trade or
business carried on by the
company incurring the
expenditure, or expenditure has
been incurred for the
purpose of trade or business
about to be carried on
by the company incurring the
expenditure and such
expenditure would have fallen to
be treated as such
qualifying mining expenditure if it
had been incurred in a
basis period; and
(b) such expenditure
has not brought into existence any
asset; and
(c) such trade or
business consists of the working of mine,
oil well or other source of
mineral deposits of a wasting nature, then such expenditure shall be deemed to
have brought into existence an asset owned by the company incurring the
expenditure and in use for the purpose of such trade or business.
(2) For the purpose of
this Schedule, an asset in respect of
which qualifying mining
expenditure has been incurred by any company for the purposes of a trade or
business carried on by it and which has not been disposed of shall be deemed
not to cease to be used for the purpose of that trade or business so long as
such company continues to carry on that trade or business.
(3) So much of any
qualifying mining expenditure incurred on the acquisition of rights in or over
mineral deposits and on the purchase of information relating to the existence
and extent of the deposits as exceeds the total of the original cost of
acquisition of such rights and of the cost of searching for, discovering and
testing such deposits prior to the purchase of such information shall be left out
of account for the purposes of this Schedule:
Provided that where
such costs were originally incurred by a company which carried on a trade or
business consisting, as to the whole or part thereof, in the acquisition of
such rights or information with a view to the assignment or sale thereof, the
price paid on such assignment or sale shall be substituted for the
aforementioned costs.
Owner and meaning of
"relevant interest".
3.
(1)
For the purposes of this Schedule, where an asset
consists of a
building, structure or works, the owner thereof shall be
taken to be the owner
of the relevant interest in such building,
structure or works.
(2) Subject to the
provisions of this paragraph, in this Schedule,
the expression
"the relevant interest" means, in relation to any
expenditure incurred
on the construction of a building, structure or
works, the interest in
such building, structure or works to which the
person who incurred
such expenditure was entitled when he incurred
it.
(3) Where, when he
incurs qualifying building expenditure or
qualifying mining
expenditure on the construction of a building,
structure or works, a
person is entitled to two or more interests,
therein, and one of
those interests is an interest which is reversionary
on all the other, that
interest shall be the relevant interest for the
purposes of this
Schedule.
Sale of buildings.
4.
(1)
Where capital expenditure has been incurred on the
construction of a
building, structure or works and thereafter the
relevant interest
therein is sold, any company which buys that interest
shall be deemed, for
all the purposes of this Schedule except the
granting of initial
allowances, to have incurred, on the date when the
purchase price became
payable, capital expenditure on the
construction thereof
equal to the price paid by it for such interest or to
the original cost of
construction whichever is the less:
Provided that where
such relevant interest is sold before the
building, structure or
works has been used, the foregoing provisions of
this paragraph shall
have effect with respect to such sale with the
omission of the words
"except the granting of initial allowances" and
the original cost of
construction shall be taken to be the amount of the
purchase price on such
sale:
Provided also that
where any such relevant interest is sold
more than once before
the building, structure or works is used, the
provisions of the
foregoing proviso shall have effect only in relation to
the last of those
sales.
Qualifying
industrial building
expenditure.
5.
For
the purpose of this Schedule-
(a) where but for this
paragraph a company is entitled to an
annual allowance in
respect of qualifying building
expenditure in respect
of an asset in use, for the
purposes of a trade or
business carried on by it at the
end of its basis
period for any year of assessment, if
that asset is an
industrial building or structure in use as
such at the end of its
basis period for any such year
then, in lieu of such
allowance and qualifying building
expenditure, the
qualifying expenditure in respect of that
asset shall be taken
to mean "qualifying industrial
building
expenditure" for any allowances to be made to
such company, in
respect of that qualifying expenditure ,
for that year, and
(b) "industrial
building or structure" means any building or
structure in regular
use-
(i) as a mill,
factory, mechanical workshop, or other
similar building, or
as a structure used in
connection which any
such buildings,
(ii) as s dock, port,
wharf, pier, jetty or other similar
building, structure,
(iii) for the
operation of a railway for public use or of
a water or electricity
undertaking for the supply of
water or electricity
for public consumption, and
(iv) for the running
of a plantation or for the working
of a mine or other
source of mineral deposits of a
wasting nature.
Initial
allowances.
6.
(1)
Subject to the provisions of this Schedule, where in its
basis period for a
year of assessment a company owning any asset
has incurred in
respect thereof qualifying expenditure wholly,
exclusively,
necessarily and reasonably for the purposes of a trade or
business carried on by
it, there shall be made to that company for the
year of assessment in
its basis period for which that asset was first
used for the purposes
of that trade or business an allowance (in this
Schedule called
"an initial allowance") at the appropriate rate per
centum,
set
forth in Table I to this Schedule, or such expenditure.
(2) Where capital
expenditure is incurred on the purchase of
an asset and either
purchaser is a person over whom the seller has
control, or the seller
is a person over whom the purchaser has control,
or some other person
has control over both the purchaser and the
seller, then, the
amount of any initial allowance to be made in respect
of such expenditure
shall be such an amount as the Board may
determine to be just
and reasonable having regard to all the
circumstances relating
to such asset and control:
Provided that any such
amount shall not exceed the amount of
the
initial allowance which would have been allowable apart from the provisions of
this sub-paragraph.
(3) Where a
company has incurred qualifying expenditure for the purchase of plants and
machineries for the replacement of the old ones, there shall be allowed such
company a once and for all 95 per cent capital allowances in the first year,
with 5% retention as the book value until the final disposal of the asset,
Provided that the aggregate capital allowances
granted in respect of any asset under this Schedule and under section 42 shall
not exceed 95% of the total cost of the asset
Annual allowances.
7.
(1)
Subject to the provisions of this Schedule, where in its
basis period for a
year of assessment, a company owning any asset
has incurred in
respect thereof qualifying expenditure wholly,
exclusively, necessary
and reasonably for the purpose of a trade or
business carried on by
it, whether or not an initial allowance was
made in respect of
that qualifying expenditure, there shall be made to
that company for each
year of assessment, in its basis period for
which that asset was
used for the purpose of that trade or business,
an allowance
(hereinafter called "an annual allowance" at the rate
specified in respect
thereof in Table II of this Schedule of such
expenditure after the
deduction of initial allowance where applicable:
Provided that an
amount of N= 10 shall be retained in the
accounts for tax
purposes until the asset is disposed of:
provided further that
where the basis period for any year of
assessment is a period
of less than one year and such allowance for
that year of
assessment shall be proportionately reduced.
(2) In the case of an
assets in respect of which an allowance
has been granted
before the commencement of this sub-paragraph,
an allowance shall
made in respect of the asset for the number of
years which, if added
to the number of years of assessment for which
allowance has already
been made, equals the number of years of
assessment for which allowance
is to made under the provisions of
sub-paragraph (1) of
this paragraph:
Provided that if an
allowance has been made for a number of
years which is equal
to or more than the number of years specified
under sub-paragraph
(1) of this paragraph, a single allowance shall be
made for an amount
which isN= 10 less than the residue of the
qualifying expenditure
for the year of assessment in which this subparagraph
takes effect.
Asset to be in
use at the end of
basis period.
8.
An
initial or an annual allowance in respect of qualifying
expenditure incurred
in respect of any asset shall only be made to a
company for a year of
assessment if a t the end of its basis period for
that year it was the
owner of that asset and that asset was in use for
the purposes of a
trade or business carried on by that company.
Balancing allowances.
9.
Subject
to the provisions of this Schedule, where in its basis
period for a year of
assessment a company owning an asset, which
has incurred in
respect thereof qualifying expenditure wholly,
exclusively,
necessarily and reasonably for the purposes of a trade or
business carried on by
it, disposes of that asset an allowance
(hereinafter called
"a balancing allowance") shall be made to that
company for that year
of the excess of the residue of that expenditure,
at the date such asset
in disposed of, over the value of that asset at
that date:
Provided that a
balancing allowance shall only be made in
respect of such asset
if immediately prior to its disposal it was in use
owner in the trade or
business for the purpose of which such
qualifying expenditure
was incurred.
Balancing
charges.
10.
Subject
tot he provisions of this Schedule, where in its
basis period for a
year of assessment a company owning an asset,
which has incurred in
respect thereof qualifying expenditure wholly,
exclusively,
necessarily and reasonably for the purposes of a trade or
business carried on by
it, disposes of that asset, a charge (hereinafter
called "a
balancing charge") shall be made on that company for that
year of the excess of
the value of that asset, at the date of its disposal,
over the residue of
that expenditure at that date:
Cap. 85. of 1958
Edition.
Provided that a balancing
charge shall only be made in respect
of such asset if
immediately prior to its disposal it was in se by such
owner in the trade or
business for the purposes of which such
qualifying expenditure
was incurred and shall not exceed the total of
any allowances made to
such owner under the provisions of this
Schedule in respect of
such asset and, in cases falling under
paragraph 19 of the
Fourth Schedule to the Income Tax Act, of any
deductions made under
section 10 of this Act in respect of the capital
cost of such asset.
Residue
11.
(1)
The residue of qualifying expenditure, in respect of any
asset, at any date,
shall be taken to be the total qualifying expenditure
incurred on or before
that date, by the owner thereof at that date, in
respect of that asset,
less the total of any initial or annual allowances
made to such owner, in
respect of that asset, before that date.
(2) For the purpose of
this paragraph, an initial allowance or
annual allowances
shall be deemed to be made at the end of the
basis period for the
year of assessment for which any such allowance is made.
Meaning of
"disposed of".
12.
Subject
to any express provision to the contrary, for the
purposes of this
Schedule-
(a) a building,
structure of works of a permanent nature is
disposed of if any of
the following events occur-
(i) the relevant
interest therein is sold, or
(ii) that interest,
being an interest depending on the
duration of a
concession, comes to an end on
the coming to an end
of that concession, or
(iii) that interest,
being a leasehold interest, comes to
an end otherwise than
on the person entitled
thereto acquiring the
interest which is
reversionary thereon,
or
(iv) the building,
structure or works of a permanent
nature are demolished
or destroyed or, without
being demolished or
destroyed, cease altogether
to be used for the
purpose of a trade or business
carried on by the
owner thereof;
(b) plant, machinery
or fixtures are disposed of if they are
sold, discarded or
cease altogether to be used for the
purposes of a trade or
business carried on by the owner
thereof;
(c) assets in respect
of which qualifying mining expenditure
is incurred are
disposed of if they are sold or if they
cease to be used for
the purposes of the trade or
business of the
company incurring the expenditure
either on such company
ceasing to carry on such trade
or business or on such
company receiving insurance or
compensation monies
thereof;
Value of an
asset.
13.
(1)
The value of an asset at the date of its disposal shall be
the net proceeds of
the sale thereof or of the relevant interest therein,
or if it was disposed
of without being sold, the amount which, in the
opinion of the Board,
such asset or the relevant interest therein, as the
case may be, would
have fetched if sold in the open market at that
date, less the amount
of any expenses which the owner might
reasonably be expected
to incur if the asset were so sold.
(2) For the purposes
of this paragraph, if an asset is disposed
of in such
circumstances that insurance or compensation monies are
received by the owner
thereof, the asset or the relevant interests
therein, as the case
may be, shall be treated as having been sold and
as though the new
proceeds of the insurance or compensation monies
were the net proceeds
of the sale thereof.
(3) So much of
sub-paragraph (1) of this paragraph as relates
to the circumstances
of determining the value of an asset by reference
to the disposal of
such asset, other than by way of sale, shall have
effect-
(a) in relation to any
asset or the relevant interest therein
disposed of not being
by way of bargain made at arm's
length; or
(b) where the sale is
between persons who are related to
each other or between
person both of whom are
controlled by some
other person or one of whom has
control over the
other.
Apportionment.
14.
(1)
Any reference in this Schedule to the disposal, sale or
purchase of any asset
includes a reference to the disposal, sale or
purchase of that
asset, as the case may be, together with any other
asset, whether or not
qualifying expenditure has been incurred on
such last-mentioned
asset; and where an asset is disposed of, sold, or
purchased together
with another asset, so much of the value of the
assets as, on a just
apportionment, is this Schedule, be deemed to be
the value of or the
price paid for that asset, as the case may be.
For the purposes of
this sub-paragraph, all the assets which
are purchased or
disposed of in pursuance of one bargain shall be
deemed to be purchased
or disposed of together, notwithstanding that
separate prices are or
purport to be agreed for each of those assets or
that there are or
purport to be separate purchases of disposals of
those assets.
(2) The provisions of
sub-paragraph (1) of this paragraph shall
apply, with any
necessary modifications, to the sale or purchase of the
relevant interest in
any asset together with any other asset or relevant
interest in any other
asset.
Part of an asset.
15.
Any
reference in this Schedule to any asset shall be
construed whenever
necessary as including a reference to a part of
any asset (including
an undivided part of that asset in the case of joint
interests therein) and
when so construed any necessary
apportionment shall be
made as may, in the opinion of the Board, be
just and reasonable.
Extension of
meaning of "in
use".
16.
(1)
For the purposes of this Schedule, an asset shall be
deemed to be in use
during a period of temporary disuse.
(2) For the purposes
of paragraphs 6, 7 and 8 of this Schedule-
(a) an asset in
respect of which qualifying expenditure has
been incurred by the
company owning such asset for
the purposes of a
trade or business carried on by it shall
be deemed to be in
use, for the purposes of that trade
or business, between
the dates hereinafter mentioned,
where the Board is of
the opinion that the first use to
which the asset will
be put by the company incurring
such expenditure will
be for the purposes of that trade or
business;
(b) the said dates
shall be taken to be the date on which
such expenditure was
incurred and the date on which
the asset is in fact
first put to use:
Provided that where
any allowances have been given in
consequence of this
sub-paragraph and the first use to which such
asset is put is not
for the purposes of such trade or business, all such
additional assessments
shall be made as may be necessary to
counteract the benefit
obtained from the giving of any such
allowances.
Exclusion of
certain
expenditure.
17.
Where
any company has incurred expenditure which is
allowed to be
deducted, in computing the profits of its trade or
business under section
24 of this Act, such expenditure shall not be
treated as qualifying
expenditure.
Application of
lessors.
18.
(1)
Where a company owning any asset-
(a)
has incurred capital expenditure
in respect thereof
(b) leases that asset
to any person under an operating lease contract for use wholly, exclusively,
necessarily and reasonably for the
purposes of a trade or
business carried on or about to be carried on by such person; and
the provisions of this
Schedule shall apply, as though such expenditure were incurred for the purposes
of a trade or business carried on by the owner or the lessor and as though the
owner or the lessor were using the asset
for such last mentioned trade or business in the way in which and for
the period or periods during which the asset is in fact in the first mentioned
trade or business.
(2) where however an
asset is acquired by any hirer or lessee under a finance lease contracts, the
terms of which provide for transfer of ownership risks and rewards to the hirer
or lessee the provisions of this schedule shall apply in the same way as it applies
to an asset acquired by any owner or lessor of an asset for the purposes of his
trade or business but shall so apply subject to the following modifications
that is to say
(a)
the qualifying expenditure within
the provisions of this schedule shall, in relation to any asset so acquired
under that contract be limited to the amount of the total lease payments due
from hirer or lessee, during the basis period excluding in the computation of
such qualifying expenditure any interest charges payable under the contract
(b)
any reference in this
sub-paragraph (2) of this paragraph to any owner or lessor of any asset shall
be construed as including reference to a hirer or lessee under the finance
lease contract and as excluding a reference to the person leasing the assert to
the hirer or lessee under the contract
(3) Subject to the
provisions of this schedule where a company has incurred capital expenditure on
plant and machinery or acquires same by virtue of sub-paragraph (2) of this
paragraph, wholly, exclusively, necessarily and reasonably for the purposes of
a trade or business carried on by it there shall be due for the purposes of a
trade or business carried on by it an investment allowance of ten per cent
of such expenditure.
(4) For the purposes
of this schedule, the terms operating lease and finance lease shall have
the meaning ascribed to them by the statement of accounting standard on leases [36]
Asset used or
expenditure incurred partly for the purposes of a trade or business.
19.
(1)
The following provisions of this paragraph shall apply where either or both of
the following conditions apply with respect to
any asset-
(a) the owner of the
asset has incurred in respect thereof qualifying expenditure partly for the
purposes of a trade or business carried on by him and partly for other
purposes;
(b) the asset in
respect of which qualifying expenditure has been incurred by the owner thereof
is used partly for the
purposes of a trade or
business carried on by such owner and partly for other purposes.
(2) Any allowances and
any charges which would be made if
both such expenditure
were incurred wholly, exclusively, necessarily
and exclusively for
the purposes of such trade or business shall be
computed in accordance
with the provisions of this Schedule.
(3) So much of the
allowances and charges computed in
accordance with the
provisions of sub-paragraph (2) of this paragraph
shall be made as in
the opinion of the Board is just and reasonable
having regard to all
the circumstances and to the provisions of this
Schedule.
Disposal without
change of
ownership.
20.
Where
an asset in respect of which qualifying expenditure
has been incurred by
the owner thereof has been disposed of in such
circumstances that
such owner remains the owner thereof, then, for
the purposes of
determining whether and, if so, in what amount, any
annual or balancing
allowance or balancing charge shall be made to
or on such owner in
respect of his use of the asset after the date of
such disposal-
(a) qualifying
expenditure incurred by such owner in
respect of such asset
prior to the date of such disposal
shall be let out of
account; but
(b) such owner shall
be deemed to have bought such asset
immediately after such
disposal for a price equal to the
residue of such
qualifying expenditure at the date of
such disposal,
increased by the amount of any
balancing charge or
decreased by the amount of any
balancing allowance
made as a result of such disposal.
Meaning of
"allowance
made."
21.
Any
reference in this Schedule to an allowance made
includes a reference
to an allowance which would be made but for an
insufficiency of
assessable profits against which to make it.
Claims for
allowances.
22.
No
allowance shall be made to any company for any year
of assessment under
the provisions of this Schedule unless claimed
by it for that year or
where the Board is of the opinion that it would be reasonable and just so to
do.
Election in double
taxation cases.
23.
(1)
Where a company makes a claim to an initial or annual
allowance under this
Schedule in connection with any trade or
business, if the taxes
in respect of the profits of the trade or business
are the subject of an
arrangement, having effect by virtue of section 45
of this Act, between
Nigeria and any other territory, for relief from
double taxation, it
may elect, at the time of making such claim or within
such reasonable
calculated at a lesser rate than that provided for in
paragraph 6 or 7 of this
Schedule and in making such election it shall
specify the amount of
such lesser rate.
(2) Where an election
has been made under this paragraph,
the amount of such
lesser rate shall be taken to be the appropriate
rate in relation to
that allowance for all the purposes of this Schedule.
Manner of
making
allowances and
charges.
24.
(1)
The amount of any charge to be made on a company
under the provisions
of this Schedule shall be made by making an
addition to its
assessable profits for the year of assessment for which
such charge falls to
be made under the provisions of this Schedule:
Provided that where
any such charge fails to be made on any
company for any year
of assessment, whenever necessary by reason
of
the assessment on that company having become final and
conclusive for that
year or for other sufficient reason, the Board may
make an additional
assessment upon such company in respect of the
amount of such charge.
(2) Subject to the
provisions of this paragraph, the amount of
any allowance to be
made to a company under the provisions of this
Schedule shall be made
by making a deduction from the remainder of
its assessable profits
for the year of assessment for which such
allowance falls to be
made under the provisions of this Schedule.
(3) For the purposed
of this paragraph, any such remainder for
a year of assessment
shall be ascertained by first giving full effect to
the provisions of
sub-paragraph (1) of this paragraph and to the
provisions of section
31 relating to the deduction of the amount of any
loss.
(4) Where full effect
cannot be given to any deduction to be
made under
sub-paragraph (2) of this paragraph for any year of
assessment owing to
there being no such remainder for that year, or
owing to the remainder
for that year being less than such deduction,
the deduction or part
of the deduction to which effect has not been
given as the case be,
shall, for the purpose of ascertaining total profits
(of the company
entitled to such deduction) under section 31 for the
following year, be
deemed to be a deduction for that year, in
accordance with the
provisions of sub-paragraph (2) of this paragraph,
and so on for
succeeding years.
(5) Where a company is
entitled to a deduction under the
preceding sub-paragraph,
or to a deduction in respect of a balancing
allowance, in respect
of an asset used in a trade or business carried
on by it, for a year
of assessment in which that trade or business
permanently ceases to
be carried on by it and full effect cannot be
given to any such
deduction for that year owing to there being no such
remainder of
assessable profits for that year or owing to the remainder
of its assessable
profits for that year being less than such deduction,
that deduction or the
part to which effect has not been given, as the
case may be, may, on a
claim being made by such company, be given
by way of deduction
from any remainder of its assessable profits for
the preceding year of
assessment, and so on for other preceding year,
so, however, that no
such deduction shall be given by virtue of this
sub-paragraph for year
earlier than the fifth year before the first mentioned
year of assessment:
Provided that where
any relief is given under this subparagraph
in respect of any such
deduction, the provisions of the
preceding
sub-paragraph shall cease to have effect in respect of that
deduction for any year
of assessment subsequent to the year of
assessment in which
such trade or business ceases.
(6) Where any
deduction falls to be given under the provisions
of the preceding
sub-paragraph for any preceding years of
assessment, whenever
necessary, by reason of any assessments of
those years having
become final and conclusive, or for other sufficient
reason, the Board with
respect to each such year may make such
repayment or set-off
of the tax, or of any part of such tax, paid or
charged for any such
year as may be appropriate, in lieu of making
any such deduction.
(7)In giving effect to the
provisions of subparagraph (2), the amount of capital allowances to be deducted
from assessable profits in any year of assessment shall not exceed
662/3 per cent of such
assessable profits of a company but any company in the agro-allied industry or
which is engaged in the trade or business of manufacturing shall not be
affected by the restriction under this subparagraph[37].
(8) In this paragraph-
"company in the
agro-allied industry" is a company to which
subsection (8) of
section 9 of this Act applies.
Paragraph 6. TABLE
I-INITIAL ALLOWANCES[38]
TABLE II ANNUAL
ALLOWANCES
Qualifying Building Expenditure .. .. .10
Qualifying Furniture and
Fittings .. .. .. 20
Qualifying Industrial
Building
Expenditure .. .. .. 10
Qualifying Motor Vehicle
Expenditure .. .. .. 25
Section 11(6) THIRD SCHEDULE
TAX EXEMPTION ON
CERTAIN INTERESTS
TABLE OF TAX EXEMPTION
ON INTEREST ON FOREIGN LOANS
Section 86. FOURTH
SCHEDULE
WARRANT AND AUTHORITY
TO LEVY BY DISTRESS UNDER THE COMPANIES INCOME TAX ACT
To (a)
................................................................................
Name of Company (b)
...................................................................
Amount of tax to be
levied by distress (c) .............................................
The Federal Board of
Inland Revenue, in exercise of powers vested in it by section
86 of the Companies
Income Tax Act (Cap. C21), hereby authorises you to collect and
recover the sum of (c)
................, being arrears of tax due for the years of assessment
hereinafter mentioned
from the above named company whose place of business is at
(d).................;
and for the recovery thereof the said Board further authorises that you, with
the aid (if necessary)
of your assistants and calling to your assistance any police officer (if
necessary) which
assistance he is by law required to give, do forthwith levy by distress the
said sum together with
the costs and charges of and incidental to the taking and keeping of
such distress, on the
goods, chattels, land, premises or other distrainable things of the said
company wherever the
same may be found and on all goods which you may find in any
premises or on any
lands in the use of possession of the said company or of any other
person on its behalf
or in trust for the company.
And for the purpose of
levying such distress you are hereby authorised if necessary,
with such assistance
as aforesaid to break open any building or place in the daytime.
2. The particulars of
the said arrears of tax are as follows-
Signed for and on
behalf of the Federal Board of Inland Revenue at
.....................
this ........................... day of ......................
19.....................
Signature (f) .........................................
Chairman
Federal Board of
Inland Revenue
NOTES
(a) Insert the name of
the name of the officer who is authorised by the Board to
execute the warrant of
distress.
(b) Insert the name of
the company on whose goods, chattels, land, premises or
other distrainable
things the warrant of distress is to be executed.
(c) Insert the amount
of tax outstanding against the company and which amount
is to be levied by
distress.
(d) Insert the address
of the place of business of the company.
(e) Insert the
particulars of the arrears of tax to be levied by distress, stating the
years of assessment,
the numbers of notices of assessment and the amount
of tax due in respect
of each such year of assessment.
(f) To be signed by
the Chairman, Federal Board of Inland Revenue.
section 25(5) . FIFTH
SCHEDULE
FUNDS, BODIES AND
INSTITUTIONS IN NIGERIA TO WHICH DONATION MAY BE MADE UNDER section 25 OF
THIS ACT
1. The Boys Brigade of
Nigeria.
2. The Boys Scouts of
Nigeria.
3. The Christian
Council of Nigeria.
4. The Cocoa Research
Institute of Nigeria.
5. Any educational
institution affiliated under, any law with any university in Nigeria, or
established under any
law in Nigeria and any other educational institution
recognized by any
Government in Nigeria.
6. The Girl Guides of
Nigeria.
7. Any hospital owned
by the Government of the Federation or of a State or any
University Teaching
Hospital or any hospital which is carried on by a society or
association otherwise
than for the purpose of profits or gains to the individual
members of that
society or association.
8. The Institute of
Medical Laboratory Technology.
9. The National
Commission for Rehabilitation.
10. The National
Library.
11. The Nigerian
Council for Medical Research.
12. The National
Science and Technology Development Agency.
13. The Nigerian
Institute for International Affairs.
14. The Nigerian
Institute for oil Palm Research.
15. The Nigerian
Institute for Trypanosomiasis Research.
16. The Nigerian
Museum.
17. The Nigerian Red
Cross.
18. A public fund
established and maintained for providing money for the construction or
maintenance of a
public memorial relating to the civil war in Nigeria which ended on
15 January, 1970.
19. A public institution
or public fund (including the Armed Forces Comfort Fund)
established or
maintained for the comfort, recreation or welfare of members of the
Nigerian Army, Navy or
Air Force.
20. A public fund
established and maintained exclusively for providing money for the
acquisition,
construction, maintenance or equipment of a building used or to be used
as a school or college
by the Government of the Federation or a State or by a public
authority or by a
society or association which is carried on otherwise than for the
purpose of profit or
gain to the individual members of that society or association.
21. The National Youth
Council of Nigeria.
22. National Sports
Commission and its State Associations.
23. The Nigerian
Society for the Deaf and Dumb.
24. The society for
the Blind.
25. The Nigerian
National Advisory Council for the Blind.
26. Associations or
Societies for the Blind in Nigeria.
27. Training Centres
and Residential Schools for the Blind in Nigeria.
28. The National
Braille Library of Nigeria.
29. The Nigerian Youth
Trust.
30. Van Leer Nigerian.
31. Southern Africa
Relief Fund.
32. Islamic Education
Trust.
33. The Institute of
Chartered Accountants of Nigeria Building Fund.
34. Any public fund
established or approved by the Government of the Federation or
established by any of
the State Governments in aid of or for the relief of drought or
any other national
disaster in any part of the Federation.
Section
27
Section
64(2) 1991 No. 21
SIXTH
SCHEDULE
WARRANT AND AUTHORITY TO
ENTER PREMISES OFFICES ETC. UNDER THE
COMPANIES
INCOME TAX ACT
To (a)
................................................................................
Name of Company (b)
................................................................... Incorporation
or Identification No. (c) ............................................. Place
of business. (d) ..........................................
The Federal Board of
Inland Revenue, in exercise of powers vested in it by section 64 of the
Companies Income Tax Act Cap. C21 hereby authorises you to enter the premises
office, place of management or residence of the principal officer, office of
the agent, factor or representative of the company which company has been
suspected by the board of fraud willful default, etc. in connection with the
tax imposed under the aforesaid Act and whose premises office, place of management or residence of
the principal officer, office of the agent, factor or representative is at
(d) .......................................... and for the carrying out
of this assignment,
the said Board further authorises that you, with
the aid (if necessary) of your assistants and calling to your assistance any police
officer which assistance the police is by law required to give, search and
remove (if necessary) such records, books, and documents of the company
wherever they may be found either in possession of any officer of the company
or any other person on its behalf.
For the purpose of
your entry into the aforementioned premises, you are hereby authorized if
necessary, with such assistance as aforesaid to break open any building in the
daytime.
Signed for and on
behalf of the Federal Board of Inland Revenue at ..................... this
........................... day of ......................
19.....................
Signature (e)
.........................................
Chairman
Federal Board of
Inland Revenue
NOTES
(a) Insert the name of
the name of the officer who is authorised by the Board to
execute the warrant of
entry.
(b) Insert the name of
the company in whose premises the warrant of entry is to be executed
(c) Insert the
identification number of the company in whose premises the warrant of entry is
to be executed
(d) Insert the place of business of the
company. (e) To be signed by the Chairman, Federal Board of Inland Revenue.[40]
INCOME
TAX APPEALS (APPEAL COMMISSIONERS) RULES L.N. 169 of 1962[41]
ARRANGEMENT OF RULES
RULES
1. Short title.
2. Interpretation.
3. Appellant may be
represented in proceedings.
4. Notice of appeal.
5. Notices, etc.
6. Application for
late appeal.
7. Register of
appeals.
8. Withdrawal of
notice of appeal.
9. Notice of hearing.
10. Place of hearing.
11. Procedure at the
hearing.
12. Insuring of
precepts.
13. Determination of
appeal.
14. Power to hear
evidence on oath or affirmation.
15. Determination of
appeals notwithstanding absence.
16. Decisions book.
SCHEDULE
L.N. 169 of 1962 INCOME
TAX APPEALS (APPEAL
COMMISSIONERS) RULES
under section 55
Commencement: 13th
December, 1962
Short title. 1. These
Rules may be cited as the Income Tax Appeals
(Appeal Commissioners)
Rules.
Interpretation. 2. (1)
In these Rules, unless the context otherwise requires-
Cap. C21. "Act'
means the Companies Income Tax Act;
"accountant"
means any person practising accountancy and employed
by the appellant in
that capacity;
"applicant",
in relation to an intended appeal, means any company
applying to avail
itself of the proviso to subsection (1) of section 57 if
this Act;
"Board"
means the Federal Board of Inland Revenue established
under the Act;
"Chairman",
in relation to a meeting of Commissioners means, the
person appointed to be
chairman at that meeting in accordance with
paragraph (b) of
subsection (1) of section 76 of the Act;
"Commissioners"
means the body of Appeal Commissioners
established under
subsection (1) of section 74 of the Act;
"issuing
office", in relation to any appeal against an assessment or
any application under
the proviso to subsection (1) of section 57 of the
Act, mean the office
of the Federal Inland Revenue Department from
which the notice of
refusal of the Board to amend the assessment as
desired was issued;
"secretary" means
the secretary to the Commissioners designated
under subsection (6)
of section 74 of the Act;
Cap. 204.
"solicitor"
means any legal practitioner entitled to practice before the
Supreme Court of
Nigeria and includes any law officer to whom the
provisions of the Law
Officers Act apply.
(2) Any reference in
these Rules to section is to a section of the
Act except where
reference to a section is followed by a specific
reference to some
other Act.
Cap. 179.
(3) Where, by any
provision of the Act or of the Industrial
Development (Income
Tax Relief) Act, the provisions of section 57 of
the Act are made
applicable, whether mutatis mutandis or with any
necessary
modifications, there Rules shall apply with any necessary
modification, for the
purposes of such application.
Applicant may be
represented in
proceedings.
3.
In
all proceedings before the Commissioners the appellant
may be represented by
a solicitor or an account and the Board may be
represented by a
solicitor or an officer of the Federal Inland Revenue
Department.
Notices of
appeal.
4.
A
notice of appeal against an assessment to be given under
subsection (1) of
section 57 of the Act-
(a) to the secretary,
shall be given or served upon him at
his official address
as notified in the Federal Gazette
and such notice shall
be accompanied by a statement of
the address of the
issuing office, and
(b) to the Board,
shall be given or served upon the officer in
charge of the issuing
office.
Notices, etc. 5. any
notice or other document to be given, served or issued
under these Rules-
(a) if to or upon the
secretary, shall be given to or served
upon him at his
official address as notified in the
Federal Gazette;
(b) if to or upon the
Board, shall be given to or served upon
the officer in charge
of the issuing office or of such other
office of the Federal
Inland Revenue Department as
may have been notified
to the secretary and the
appellant by the Board
for any particular appeal;
(c) if to or upon an
appellant shall be given to or served
either by registered
post at its address for service as
given in accordance
with the provisions of subsection
(2) of section 57 of
the Act or by personal service on the
principal officer or
representative of appellant within
Nigeria;
(d) If to or upon an
applicant, shall be give or served either
by registered post at
this address for service as given in
accordance with
paragraph (1) of rule 6 or by personal
service on the
principal officer or representative of the
applicant, within
Nigeria;
(e) if to or upon any
person other than a person referred to
in this paragraph,
shall be given or served either by
registered post-
(i) in the case of a
company incorporated in Nigeria,
at the registered
office of the company,
(ii) in the case of a
company incorporated outside
Nigeria, to the
individual authorised to accept
service of process
under the Companies and
Allied Matters Act at
the address filed with the
Corporate Affairs
Commission, or to the
registered offices; of
the company wherever it
may be situated,
(iii) in the case of
an individual or body of persons, at
the last known
business or private address of
such individual or
body of person;
Cap. 59. or personally
in accordance with section 16 of
the Act.
Application for
late appeal.
6.
(1)
Where an intending appellant wishes to avail itself of the
proviso of subsection
(1) of section 57 of the act it shall, within the
period of sixty days
mentioned in that proviso, make a written
application to the
secretary at his official address as notified in the
Federal Gazette-
(a) giving the
particulars required by that proviso;
(b) showing the cause
which prevented it from giving notice
of appeal within the
period of thirty days prescribed by
that subsection;
(c) showing that there
was no unreasonable delay on its
part;
(d) giving an address
for service; and
(e) giving the address
of the issuing office.
(2) When making such
application the applicant shall send a
copy thereof for the
Board to the officer in charge of the issuing office.
(3) Upon receipt of an
application made under this rule, the
secretary shall-
(a) endorse thereon
the date of the receipt thereof and
enter the same in a
register of income taxes
applications to be
kept for that purpose by the secretary;
and
(b) as soon as
possible and at least twenty-one days before
the sate fixed for the
hearing of the application, give
notice in writing of
the date, time and place fixed for the
hearing of the
application to each of the
Commissioners, to the
applicant and to the Board.
(4) On the hearing of
an application made under this rule-
(a) the Commissioners
shall decide whether the application
was duly made in
accordance with this rule and, if they
decide that it was so
made, whether they are satisfied
as to the matters
required by the proviso to subsection
(1) of section 57 of
the Act to be show to their
satisfaction;
(b) the chairman of
the meeting shall record, in the register
of income tax
applications, the decision of the
Commissioners.
Register of
appeals.
7.
Upon
receipt of a notice of appeal given under subsection
(1) of section 57 of
the Act-
(a) the secretary
shall endorse thereon the date of the
receipt thereof and
enter the same in a register of
income tax appeals to
be kept for that purpose by the
secretary; and
(b) if it appears to
the secretary that such notice was not
given within the time
prescribed by subsection (1) of
section 47 of the Act
or does not specify the particulars
required by subsection
(2) of section 57 of the Act the
secretary shall notify
the appellant and the Board, in
writing, accordingly.
Withdrawal of
notice of appeal.
8.
Where
an appellant has been notified under rule 7 of these
Rules-
(a) it may elect to
withdraw the notice of appeal given by it,
giving notice of the
withdrawal to the secretary and to
the Board and, if
within time, either give a fresh notice of
appeal or make an
application under rule 6 of these
Rules; and
(b) if the notice of
appeal is not withdrawn under this rule
the Commissioners
shall decide, at a hearing of the
appeal, whether or not
the notice was valid.
Notice of
hearing.
9.
The
secretary, shall, at least twenty-one days before the
date fixed for the
hearing of an appeal, given notice in writing of the
date, time and place
fixed for the hearing of the appeal to each of the
Commissioners, to the
appellant and to the Board and, shall at least
twenty-one days before
the date fixed for an adjourned hearing of an
appeal, give a similar
notice in writing in respect of the adjourned
hearing, provided that
no such notice shall be given in respect of any
adjourned hearing,
provided that no such notice shall be given in
respect of any
adjourned hearing for which the Commissioners have
fixed a date at their
previous hearing.
Place of hearing. 10.(1)
Subject to the provisions of paragraph (2) thereof, the
pace to be fixed by
the secretary for the hearing of an appeal or an
application (including
an adjourned hearing thereof) shall be a place
in the town in which
the issuing office is situated.
(2) If it appears to
the secretary that it will be more convenient
for the place of any
such hearing to be fixed in some other town in
which there is an
office of the Federal Inland Revenue Department he
may give notice in
writing to the appellant or applicant and to the
Board of his intention
to fix the place of hearing in that other town, and
unless the secretary
receives an objection in writing to the notice
within fourteen days
of the giving of the notice he may fix the place of
the hearing in
accordance with the notice.
Procedure at the
hearing.
11.
(1)
At the hearing, including any adjourned hearing, of any
appeal against an
assessment the Commissioner shall admit all lawful
evidence (whether oral
or documentary) adduced by the appellant or
the Board or any
person appearing on their behalf.
(2) Proceedings before
the Commissioners shall be
commenced by the
appellant, or any person appearing on its behalf,
producing any
documents or writings whereon its appeal against the
assessment may be
founded and any witness it may require to give
evidence or have
examined in support of the same.
(3) The case on the
part of the appellant having been heard,
the Board or person
appearing on its behalf, shall in like manner
produce any documents
it may desire to have read by the
Commissioners and any
witness it may require to give evidence or
have examined.
(4) The Board, or the
person appearing on its behalf, may in
connection with the
hearing of appeals make use of or produce in
evidence any return,
correspondence, accounts, plans statements, or
other documents to
which it has had or may have lawful access for the
purpose of taxation
and all such documents shall be admissible
whether or not they
are original documents.
(5) The rules of
evidence regarding the examination in chief,
cross-examination and
re-examination of a witness shall apply where
a witness is produced
to give oral evidence.
Issuing of
precepts.
12.
(1)
At any such hearing, including any adjourned hearing,
of an appeal against
an assessment the Commissioners may, if they
consider that it is
necessary, adjourn the hearing and instruct the
secretary to issue a
precept to-
(a) any person (other
than a solicitor or accountant acting
for the appellant in
connection with his liability to tax)
whom they think might
be able to give evidence with
respect to any matter
relating to the assessment, to
appear at any
adjourned hearing to be examined;
(b) any person
including the appellant or its representative,
to produce or deliver
to them, within the time limited by
the precept or at any
adjourned hearing any accounts,
books, records or
other documents relating to-
(i) the property of
the appellant, or
(ii) the trade, or
business, carried on or exercised by the
appellant, whether
alone or with others, or
(iii) the amount of
the profits or gains of the appellant,
distinguishing the
particular amounts derived from each
separate source, or
(iv) any deductions
made in arriving at the profits or
gains of the
appellant.
(2) The Commissioners
may issue further precepts whenever
they consider it
necessary for the purposes aforesaid, until complete
particulars have been
furnished to their satisfaction.
(3) The Board may
inspect and take copies of or extracts from
any books, accounts or
document made available by the appellant
under this rule.
(4) Notwithstanding
that the Commissioners have admitted an
appeal to be made by
any agent, clerk, servant or any other
representative of the
appellant in accordance with the provisions of
subsection (6) of
section 76 of this Act they may instruct the secretary
to issue a precept to
the appellant under paragraph (1) or (2) hereof.
Schedule. (5) Any
precept to be issued under this rule shall be in the form
set out in the
Schedule hereto.
Determination of
appeal.
13.
(1)
At the conclusion of the evidence (including any
evidence admitted by
virtue of rule 12 of these Rules) the appellant or
person appearing on
its behalf and thereafter the Board, or person
appearing on its
behalf shall be entitled to be heard in argument, and
thereafter the
appellant or person appearing on its behalf may reply to
any new points raised
in the argument presented by or on behalf of
the Board.
(2) The Commissioners
shall then determine the matter in
dispute or may reserve
their decision until a later date and whenever
the decision is so
reserved, the decision shall be given at such time
and place as may be
fixed by the Commissioners and of which
reasonable notice
shall have been to the parties.
Power to hear
evidence on oath
or affirmation.
CAP. O1
14.
The
Commissioners may require any evidence to be given
on oath or affirmation
and the provisions of the Oaths Act shall apply
to any oath or
affirmation administered by the Commissioners.
Determination of
appeals
notwithstanding
absence.
15.
If
at the hearing of any appeal against an assessment or of
any application to
appeal or at any adjournment thereof, it appears to
the Commissioners that
the appellant or person appearing on its
behalf, is absent
otherwise than by reason of appearing on its behalf,
is absent otherwise
than by reason of absence from Nigeria, sickness
or other reasonable
cause, the Commissioners may, notwithstanding
the absence of the
appellant or person appearing on its behalf,
proceed in accordance
with the provision of subsection (9) of section
58 of the Act.
Decisions book.
16.
The
secretary shall maintain a book in which every decision
of the Commissioners
shall be recorded in accordance with the
provisions of
subsection (10) of section 76 of the Act.
SCHEDULE
Rule 12(5). FORM OF
PRECEPT
COMPANIES INCOME TAX
ACT
(Cap. 60)
PERSONAL INCOME TAX
(LAGOS) ACT, 1961
(1961, No. 23)
NOTICE TO WITNESS TO
ATTEND BEFORE APPEAL COMMISSIONERS
(RULE 12)
.........................................
v. Federal Board of Inland Revenue
INCOME TAX YEAR OF
ASSESSMENT 19......../...............
To
..................................................................
(Name of witness)
of
..................................................................
(Address of witness)
On good cause shown to
the Appeal Commissioners you are hereby ordered to
attend in connection
with the above-mentioned appeal, before the said Commissioners at
...........................
on the ............................... day of .......................... 19
................... at
............................
o'clock in the ............................noon to-
1. be examined as a
witness and your depositions taken;
2. produce any
accounts, books, records or other documents and in particular
the following-
Strike out if not
applicable.
Dated the
................................... day of
...................................... 19...............................
...............................................
Secretary,
Body of Income Tax
Appeal
Commissioners of the
Federation
L.N. 11 of COMPANIES
INCOME TAX (EXEMPTION) 1964
(INTERCONSULTING LIMITED) ORDER[42]
under section 19(2)
Commencement: 1st
April, 1963
Short title. 1. This
Order may be cited as the Income Tax (Exemption)
(Interconsulting
Limited) Order.
Exemption of
Interconsulting
Limited.
Cap. 60.
2.
The
company known as Interconsulting Limited, whose
registered office is
at 42 Klaustrasse, Zurich, Republic of Switzerland
(hereafter referred to
as "the company") is hereby exempted from the
provision of the
Companies Income Tax Act in respect of all income
earned by the Company
under an Agreement dated 13th day of July,
1963, and made between
the Government of the Federal Republic of
Nigeria and the
Company (which Agreement relates, inter alia, to the
appointment of the
Company as consulting engineers to the
Government for the
performance of additional and preparatory work,
for the designing and
planning of an integrated iron and steel mill in
Nigeria).
Duration of
exemption.
3.
The
exemption shall continue in force so long as the
Company does not
become a Nigerian Company as defined in section
84 of the Companies
Income Tax Act.
L.N 58 of COMPANIES
INCOME TAX (AUTHORISED
1964.
DEDUCTIONS)
(NIGERIAN INDUSTRIAL DEVELOPMENT BANK) RULES[43]
under section 20(h)
Commencement: 1st
April, 1964
Short title. 1. These
Rules may be cited as the Companies Income Tax
(Authorised
Deductions) (Nigerian Industrial Development Bank)
Rules.
Definitions. 2. In
these Rules-
"the
Company" means the Nigerian Industrial Development Bank
Limited.
Deductions
allowed.
3.
For
the purpose of ascertaining the profits or loss of the
Nigerian Industrial
Development Bank Limited under the Companies
Income Tax Act for any
period (being the appropriate period for
computation of such
profits or loss for a year of assessment) there
shall be deducted any
amount transferred by the Company into any
reserve funds of the
Company:
Provided, however,
that the total deduction to be allowed under
these rules for all
such periods shall not exceed the amount of four
million naira (which
amount is equal to an amount granted to the
Company by the
Government of the Federation under a loan
Agreement dated the
twenty-second day of January, 1964).
L.N. 126 of COMPANIES
INCOME TAX (EXEMPTION)
1965. (INSTITUTO DI
CREDITOR PER LE IMPRESES
DI PUBBLIC UTILITA)
ORDER[44]
under section 19(2)
Commencement: 13th
September, 1964
Short title. 1. This
Order may be cited as the Companies Income tax
(Exemption) (Instituto
di Credito per le Impress di Pubblica Utilita)
Order.
Company and
interest
exempted.
2.
The
Company known as Instituto di Credito per le Impress di
Pubblica Utilita whose
address is at Via Quintino Sella 2, Rome, Italy
(hereinafter referred
to as "the Company") is hereby exempted from
the provisions of the
companies Income Tax Act, in respect of all
income from interest
and commission earned by the Company under a
Loan Agreement dated
13th September 1964, between the Company
and the Government of
the Federal Republic of Nigeria, for financing
the Niger Dames Kainji
Development project.
Duration of
exemption.
3.
The
exemption shall continue in force for so long as the
Company does not
become a Nigerian Company as defined in section
84 of the Companies
Income Tax Act.
L.N. 128 of COMPANIES
INCOME TAX (EXEMPTION)
1965. (KERDITANSTALT
FUR WIEDERAUFBAU
FRANKFURT AM MAIN)
ORDER[45]
under section 19(2)
Commencement: 14th
August, 1964
Short title. 1. This
Order may be cited as the Companies Income Tax
(Exemption)
(Kreditanstalt fur Wiederaufbau Frankfurt am Main)
Order.
Company and
income
exempted.
2.
The
Company known as Kreditanstalt fur Wiederaufbau
Frankfurt am Main
whose address is at Lindentrasse 27, 6 Frankfurt
am Main, Federal
Republic of Germany (hereinafter referred to as "the
Company") is
hereby exempted from the provisions of the Companies
Income Tax Act, in
respect of all income from interest and commission
earned by the Company
under a Loan Agreement dated 4th August
1964, between the
Company and the Government of the Federal
Republic of Nigeria,
for financing the Lagos Second Mainland Bridge
Project.
Duration of
exemption.
3.
The
exemption shall continue in force for so long as the
Company does not
become Nigerian Company as defined in section
84 of the Companies
Income Tax Act.
L.N. 127 of COMPANIES
INCOME TAX (EXEMPTION)
1965. (KREDITANSTALT
FUR WIEDERAUFBAU
FRANKFURT AM MAIN)
(NO.2) ORDER[46]
under section 19(2)
Commencement: 14th
September, 1964
Short title. 1. This
Order may be cited as the Companies Income Tax
(Exemption) (Kreditanstalf
fur Wiederaufbau Frankfurt am Main)
Order.
Company and
income
exemption.
2.
The
Company known as Kreditanstalt fur Wiederaufbau
Frankfurt am Main
whose address is at Lindentrasse 27, 6 Frankfurt
am Main, Federal
Republic of Germany (hereinafter referred to as "the
Company") is
hereby exempted from the provisions of the Companies
Income Tax Act, in
respect of all income from interest and commission
earned by the Company
under a Loan Agreement dated 14th
September 1964,
between the Company and the Government of the
Federal Republic of
Nigeria, for financing ten Cottage Hospitals in
Northern Nigeria.
Duration of
exemption.
3.
The
exemption shall continue in force for so long as the
Company does not
become a Nigerian Company as defined in section
84 of the Companies
Income Tax Act.
L.N. 3 of COMPANIES
INCOME TAX (EXEMPTION)
1968. (COMMONWEALTH
DEVELOPMENT
FINANCE COMPANY
LIMITED) ORDER[47]
under section 19(2)
Commencement: 1st
April, 1967
Short title. 1. This
Order may be cited as the Companies Income Tax
(Exemption)
(Commonwealth Development Finance Company
Limited) Order.
Exemption. 2. The
Commonwealth Development Finance Company
Limited (hereafter
referred to as "the Company") whose address is 1
Union Court, Old Broad
Street, London, E.C.2 is hereby exempted
from the provisions of
the Companies Income Tax Act in respect of
interest derived by
the Company from money lent by it to any Nigerian
company.
Duration of
Order.
3.
This
Order shall, unless sooner revoked, continue in force
for so long as the
Company does not become a Nigerian Company
within the meaning of
section 84 of the Companies Income Tax Act.
L.N. 75 of COMPANIES
INCOME TAX (EXEMPTION)
1972.
(KREDITANSTAL
FUR WIEDERAUFBAU) ORDER[48]
under section 19(2)
Commencement: 5th
February, 1970
Tax exemption of
the profits of the
company.
1.
There
shall be exempted from tax all profits accruing in
Nigeria to the company
to which this Order relates under and by virtue
of the following
agreements made between the company and the
Government of the
Federation, that is -
(a) the Supplementary
agreement dated 20th August, 1969
for the Eko Bridge;
and
(b) the loan agreement
dated 20th August, 1969 in respect
of the extension of the
said Bridge.
Duration of
exemption.
2.
The
exemption from tax granted under section 1 of this
Order shall operate
from 5th February, 1970 and shall continue in
force for so long as
the company does not become a Nigerian
company within the
meaning of section 84 of the Companies Income
Tax Act.
Miscellaneous. 3. This
Order relates to a company by the name Kreditanstal
Fur Wiederaufbau whose
address is at No. 6 Frankfurt/Main, Federal
Republic of Germany;
and the reference in this Order to "tax" is a
reference to the tax
imposed b the Companies Income Tax Act.
Short title. 4. This
Order may be cited as the Companies Income Tax
(Exemption)
(Kreditanstal Fur Wiederaufbau) Order.
L.N. 55 of COMPANIES
INCOME TAX (EXEMPTION)
1973. (NIGERIAN AGRICULTURAL
AND CO-OPERATIVE |
