HISTORICAL BACKGROUND OF THE CITA. The war had far reaching effects on the number of viable companies left. Thus, the first CITA (of 1939) died prematurely. Before the CIT 1939, companies’ income was taxed under the Personal Income tax ordinance. Then came the 1961 Companies Income Tax Act. After undergoing several amendments, the Principal act […]
AMENDMENTS/IMPROVEMENTS INTRODUCED. Streamlining Companies Tax: The Federal Inland Revenue Service was Established under the FIRSEAct 2007 to replace the FBIR which was recognised under Section 1 of the CITA. TAT Established in Section 59. This replaced the Body of Appeal Commissioners. Part 1 of the CITA was removed. Similar provisions have been made in the […]
COMPANIES INCOME TAX (CITA) 106 Sections, 14 parts and 6 schedules. Section 1-8 has been removed so we shall start our sectional discussion from: Section 9: is the charging provision. It provides the basis of liability. On the profits of any company accruing in, brought into or received in Nigeria in respect of: Any trade […]
Section 23: EXEMPTED PROFITS. After profit from all sources have been aggregated, the exempted profits shall be subtracted. Profits of statutory corporations, cooperative Society, Incorporated Trustees/companies that are non-profit, sporting, Trade Unions (See Section 23A-E)… provided that they are not engaged in trade or business. Once such exempted companies engage in business or trade, they […]
SELF ASSESSMENT. Self-assessment requires taxpayers to diligently compute, file and remit tax liabilities in prescribed manner. According to the definition in Regulation 3 of the TASAR 2011, all these must be concurrent. Section 55, 52 and 53 mandates filing of honest returns. Section 68 is contradictory by saying that the board should serve notice. This […]
EDUCATION TAX. The Longe commission was set up to identify a solution to the problem of finance in the Education sector. The commission suggested an imposition of 2 percent Education tax on the gross profit of companies which shall be paid into the Education Fund (Managed by the Board of Trustees) which should be used […]
TECHNOLOGY TAX. Introduced by the National Information Technology Development Agency Act (NITDA). Section 1 establishes the agency as a body corporate with perpetual succession and a common seal which may sue and be sued. Imposes 1 (one) percent tax on the gross profit of specified companies (telecommunication companies, financial institutions, insurance companies, etc.) whose income […]
STAMP DUTIES. Is imposed on chargeable instruments executed in Nigeria OR which relate to a matter or thing done or to be done in Nigeria. Recognized in Item 58 of the Legislative List. In A.G V Camplough, the court noted that it can only be imposed on documents which come within those listed in the […]
VAT. Value Added Tax is a tax imposed generally on the consumption of goods and services. Was introduced in 1993 and has undergone several amendments up till the VAT Amendment Act of 2007. Before its introduction, sales tax was administered by the states. VAT has yielded more income. The basis: The tax is imposed on […]
CAPITAL GAINS TAX. Introduced in 1967. It is a tax on the Exclusive Legislative List administered by the FIRS and SBIR for corporations and individuals respectively. Section 1 of the Act defines CGT as a capital gains accruing to any person on the disposal of an asset after the first of April. The 8th Edition, […]
TAXATION ON INVESTMENT INCOME. Investment has been defined as an act of committing money or capital in order to gain profitable return in future. Investment income is the profitable return that is gained. Where it relates to companies or individuals, it shall be regulated by the CITA and PITA respectively. There are different types of […]
