TAT’s judgement on the tax deductibility of voluntary pension contribution

TAT’s judgement on the tax deductibility

The Tax Appeal Tribunal (TAT or “the Tribunal”) sitting in Lagos today, Tuesday 18 June 2019, delivered judgment in the case of Nexen Petroleum Nigeria Limited (“Appellant”) and Lagos State Internal Revenue Service (“Respondent”) to the effect that voluntary pension contribution (VPC) is a valid deduction for calculating Pay-As-You-Earn (PAYE) tax on employees’ emoluments.

Wole Obayomi

Partner, Tax, Regulatory & People Services

KPMG in Nigeria


The TAT, in delivering the judgment, noted that VPC is statutorily exempted from PAYE tax by the provisions of Sections 4(3) and 10 of the Pension Reform Act 2014 (as amended) and Section 20(1) of the Personal Income Tax Act 2011 (as amended).

Also, the TAT ruled that the Appellant is not under statutory obligation to account for tax payable on the amount of VPC withdrawn by its employees. The responsibility to recover the tax due on such withdrawals is that of the Respondent.

KPMG’s Tax Dispute Resolution Team is pleased to have provided support to the Appellant in the resolution of the tax appeal. We will issue a detailed newsletter on this decision in due course.

For any enquiries on the above, please contact:

Wole Obayomi


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