…and when the exemption no longer applies
As companies across Nigeria conclude their annual Companies Income Tax (CIT) filing obligations, tax professionals are reminding businesses and non-profit organisations that not every entity operating in the country is required to pay Companies Income Tax.
While Companies Income Tax is one of the government’s major sources of non-oil revenue, the Nigeria Tax Act provides exemptions for specific organisations whose activities are considered to serve public, charitable or mutual-interest purposes. However, tax experts caution that these exemptions are not blanket waivers, as income generated from commercial activities may still be taxable.
Section 162 of the Nigeria Tax Act outlines categories of income, profits, gains and benefits that qualify for exemption from Companies Income Tax.
According to Chizoba Ngwudo, a tax planning officer and associate member of the Institute of Chartered Accountants of Nigeria (ICAN), many organisations wrongly assume that once they qualify as a
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