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Nigeria: Tax deductibility of items claimed as business expenses (tribunal decision)

Nigeria: Tax deductibility of items

The Tax Appeal Tribunal, Lagos, issued a judgment in a consolidated case concerning the tax deductibility of certain expenses and the applicability of interest and penalty on assessments under dispute.


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The case is: Tetra Pak West Africa Ltd. v. Federal Inland Revenue Service

At issue was whether expenses such as demurrage, school fees of dependents of expatriate staff, and training and education expenses incurred by the taxpayer were legitimate business expenses that were “wholly, reasonably, exclusively and necessarily” incurred in generating the company’s profits and, therefore, allowable for tax purposes. Also, another issue was the investment allowance claimed by the taxpayer on computers. The tribunal generally concluded that these items were tax deductible expenses of the business, but disallowed the investment allowance claimed for the computer, on a finding that the computer did not qualify as “plant and equipment.”

Read a September 2020 report [PDF 233 KB] prepared by the KPMG member firm in Nigeria

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