The Excess Dividend Tax Conundrum

July 18, 2019

In 2013, Actis Africa (Nigeria) Limited (“the Appellant”) made profits and retained some of its earnings (after tax had been paid on the profits made). In contrast, no profits were made in the subsequent year, that is, 2014, as a result, no income tax was paid by the Appellant. In spite of this, the Board of Directors of the Appellant recommended that interim dividends of N49,095,020 (Forty-Nine Million, Ninety-Five Thousand and Twenty Naira) be declared to the shareholders of the company payable from the retained earnings of the company for the previous financial year.

GRATUITIES ARE NON-TAXABLE INCOMES: Tax Appeal Tribunal Rules

July 1, 2019

The Tax Appeal Tribunal (TAT) of the South-East Zone on June 21, 2019, in its decision in Nigerian Breweries Plc v Abia State Board of Internal Revenue (TAT/SEZ/002/17) held that gratuities are exempted from income tax under the Personal Income Tax Act (PITA), 2011.

The matter was instituted in 2017 by the Nigerian Breweries Plc (“the Appellant”), where the Appellant contested the decision of the Abia State Board of Internal Revenue (“the Respondent”) on taxing of gratuities paid to its retirees. The main ground of objection raised by the Appellant was that the Respondent erred in law when it assessed the Appellant’s employees to tax on gratuities paid to them by the Appellant.

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Month: July 2019

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The Excess Dividend Tax Conundrum

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GRATUITIES ARE NON-TAXABLE INCOMES: Tax Appeal Tribunal Rules