REFLECTIONS ON TAX-DEDUCTIBLE EXPENSES AS COURT OF APPEAL UPHOLDS TAX ASSESSMENTS AGAINST TOTAL EXPLORATION & PRODUCTION NIGERIA LIMITED

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In a unanimous judgment delivered on April 30, 2024 in Total Exploration & Production Nigeria Limited (“Total”) V. Federal Inland Revenue Service (FIRS) (CA/LAG.CV/465/2021), the Court of Appeal, Lagos Division, upheld Petroleum Profit Tax (PPT) assessments raised against Total by FIRS for 2006, 2007 and 2008. The assessments arose from payments made by Total for…

ECHOES OF TAX & LAW – FOREIGN CURRENCY USE IN LOCAL TRANSACTIONS IN NIGERIA

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It would seem attractive, and much tempting indeed to enter into transactions and even formal contracts in Nigeria with the pricing/payment term in United States Dollars, British Pound Sterling, and other popular foreign currencies. Some technical services, employment contracts, and credit transactions witness this.   But how safe are such agreements?   Section 20(1) of…

ECHOES OF TAX & LAW – CLAIM OF CAPITAL ALLOWANCES IN COMPANIES INCOME TAX: THE CONDITIONS AND THE PLACE OF CAFA

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Capital allowance is a provision in the Companies Income Tax Act (CITA) which allows companies to deduct their expenditure incurred on capital items before arriving at their taxable profit. Such capital items include: buildings, plants, office equipment, furniture and fittings, and motor vehicles.   Capital allowances are granted on costs incurred for the procurement of qualifying…

A LOOK AT STAKEHOLDERS’ CONSULTATION AND INPUT IN PETROLEUM REGULATIONS AS THE NUPRC AND THE NMDPRA SEEK TO RELEASE NEW REGULATIONS

Oil and GasLeave a comment

The Petroleum Industry Act (PIA), 2021, as a statutory law, creates: powers, functions, rights, obligations, offences and penalties. But, it is the regulations issued pursuant to the Act by the industry regulators that set the modalities which activate those creations of the Act. PIA made significant provisions on the right of stakeholders to be heard…

ECHOES OF TAX & LAW – TAX DEDUCTIBILITY OF FUNDS FOR DECOMMISSIONING AND ABANDONMENT IN PETROLEUM OPERATIONS

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Decommissioning and abandonment is the process of shutting down operations in an oil field, whereby installations, structures, chemicals, and operation materials are removed; and environmental restoration of the area is carried out.   It comes at the end of the field life, but is planned for at the very beginning of petroleum operations. In fact,…

Echoes of Tax & Law

TaxLeave a comment

Echoes on Input-Output  VAT Mechanism VAT is a tax paid at the rate of 7.5% on consumption (supply) of goods or services except those exempted from the tax by the VAT Act   Businesses whose VATable supplies in a year are N25 Million and above are mandated to remit to FIRS, the VAT due for…