Section 202

In this Act – General
interpreta-
"accelerator" is as defined in the Nigeria Startup Act, No. 32, 2022 ;
tion
"accounting period" means a period for which accounts have been
made up ;
"ad valorem" means the value of a transaction or property ;
"agency of Government" includes a ministry, department, statutory body,
public authority and an institution of the Federal, State and Local Government;
"approved Agent'' means any person approved by the Securities and
Exchange Commission to function as an intermediary for the conduct of a
regulated securities lending transaction ;
"aggregate covered tax paid" means the addition of the income taxes
paid by a company for a year of assessment under this Act;
"agricultural trade or business" means –
(a) primary crop production comprising the production of raw and semi-
processed crops of all kinds, but excluding any intermediate or final processing
of crops or any other associated manufactured or derivative crop product ;
(b) primary livestock production comprising the production of live animals
and their direct produce such as live or raw meat, live or raw poultry, fresh
eggs and milk of all kinds, but excluding any other associated manufactured
or derivative livestock product ;
(c) primary forestry production comprising the production of timbers of
various kinds such as firewood, charcoal, uncultivated materials gathered
and other forestry products of all kinds, including seeds and saplings, but
excluding the intermediate and final processing of timber and any other
manufactured or derivative timber product ; and
(d) primary fishing production comprising the production of fish of all
kinds, including ornamental fish, but excluding any intermediate or final
processing of any other manufactured or derivative fish product;
"angel investor" is as defined in the Nigeria Startup Act, No 32, 2022;
"assessable income" means assessable income determined under the
provisions of chapter two of this Act ;
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"authorised officer" means an officer who has been authorised by a
tax authority to perform any function under this Act;
"bank'' means a bank as defined under the Banks and Other Financial
Institutions Act, Act No. 3, 2020 ;
"banking" means business conducted or services offered by a bank ;
"beneficial owner" means a person who has ownership, control, rights,
indirect benefit or beneficial interest over shares or clients, or over income,
goods, services or assets subject to tax, or on whose behalf a transaction is
carried out ;
"borrower" means an approved borrower in a regulated securities lending
transaction;
"building" means any structure permanently affixed to land for all or
most of the useful life of that structure and shall include a house, garage,
dwelling apartment, hospital and institutional building, factory, warehouse,
theatre, cinema, store, mill building and similarly fixed structure affording
protection and shelter, but excludes any fixtures or structures that can easily
be removed from such land, such as radio and television masts, transmission
lines, cell towers, vehicles, mobile homes, caravans and trailers ;
"chargeable gains" has the meaning given in section 33 of this Act ;
"company" a company or corporation, including limited liability
partnership, established by or under any law in force in Nigeria or
elsewhere ;
"commencement of business'' means the starting of operation of a
business ;
"commencement date" means the date that an entity carries out its first
transaction which shall be the earliest of the date it –
(a) begins to market or first advertises its products or services for sale ;
(b) obtains an operating license from a regulatory authority in Nigeria ;
(c) first sale or purchase ;
(d) execute its first trading contract after incorporation ;
(e) issues or receives its first invoice ;
(f) delivers or receives its first consignment of goods ; or
(g) first renders services to its customers ;
"communication infrastructure'' means telecommunications fibre optics,
satellite cellular networks, broadband systems radio transmission towers,
undersea cables and other similar infrastructure;
"compensating payments'' means any payments made in lieu of interest
or dividend under a regulated securities lending transaction ;
"connected persons" includes in the case of –
(a) individuals, the individuals are married or are relatives ;
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(b) a trustee in relation to a settlement, the trustee and the settlor, or the
spouse or a relative of the settlor;
(c) a partnership, a person is related to the person, or spouse or a close
relative of the person with whom he is in partnership ;
(d) a company –
(i) a person is connected to a company of which he, or his spouse or
a close relative has control,
(ii) a company is connected to another company where the same
person has control over both companies, or connected persons acting
separately have control over the companies,
(iii) a company is connected to two or more persons who acting
together, or through a person acting on their directions exercise control
over the company,
(iv) two companies are connected where one company participates
directly or indirectly in the management, control or capital of the other
company, or the same persons participate directly or indirectly in the
management, control or capital of a company and another company;
(e) other cases, two persons are connected where –
(i) one may reasonably be expected to act in accordance with the
directions, requests, suggestions, or wishes of the other person,
(ii) both persons may reasonably be expected to act in accordance
with the directions, requests, suggestions, or wishes of a third person, or
(iii) one person has the practical ability to control the business decisions
of another person :
Provided that two persons are not connected solely by reason of the fact
that one person is the employee or client of the other, or both persons are
employees or clients of a third person ;
"constituent entity" means any company, permanent establishment or
business unit that is a member of a multinational enterprise ;
"conveyance on sale" means the transfer of interest in real property,
being land and building, only ;
"digital assets" means digital representation of value that can be digitally
exchanged, including crypto assets, utility tokens, security tokens, non-fungible
tokens (NFT), such other similar digital representation or derivatives of any
of the listed or similar assets and any other asset as may be defined by the
relevant regulatory authority ;
"disposal of assets" has the meaning assigned to it under section 35 (1)
of this Act ;
"economic development incentive certificate" means a certificate issued
under this Act certifying, among other things, a company to be a priority
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company, or any such certificate as amended under this Act ;
"employment" includes any appointment or office, whether public or
otherwise, for which remuneration is payable ;
"entertainment" includes any exhibition and performance in which
admission of people is subject to payment by such persons but does not
include the following –
(a) play on stage and performance which are carried out by govern-
ment-approved educational institutions as part of learning ;
(b) sport, game or other cultural performance sponsored by
Government ;
(c) entertainment sponsored by a charitable, educational, medical, scientific
or cultural institution of a public character; and
(d) entertainment organised by a non-profit making, charitable, educational,
medical, scientific or cultural society registered under the law where the
entertainment is in furtherance of the objectives of the society ;
"executor" includes any person administering the estate of a deceased
person ;
"exported service'' means a service rendered to a non-resident person
outside Nigeria by a taxable person regardless of where the service is
rendered, provided that a service rendered to the Nigerian permanent
establishment of a non-resident person shall not qualify as exported
service ;
"family income" refers to any income accruing to a family from all
sources;
"foreign company" means a non-resident company or any company
other than a Nigerian company;
"financial institutions'' includes depository institutions, custodial institu-
tions, investment institutions and insurance companies;
"finance lease'' means a lease arrangement where the lessee effec-
tively assumes most of the risks and rewards associated with asset
ownership;
"financial services'' includes depository services, custodial services,
investment services and insurance services;
"government" means the Federal Government, State Government or
the Federal Territory or the Local Government Council;
"goods' for the purposes of Chapter Six of this Act, means all forms of
tangible properties, movable or immovable;
"gross turnover" means the gross inflow of economic benefits during
the period arising in the course of the operating activities of an entity when
those inflows result in increases in equity including sales of goods, supply of
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services, receipt of interest, rents, royalties or dividends other than increases
relating to contributions from equity participants;
"hire purchase" means a financial arrangement in which a person
acquires immediate use of an asset by making regular instalment payments
over a specified period and may gain ownership of the asset on the comple-
tion of the payments;
"import" means bringing in goods and services from another country or
from an export processing zone;
"importer" means any person who imports goods;
"individual" includes a corporation sole and a body of individuals but
does not include a company, partnership, community, family, trustee or
executor or any body of trustees, executors or legal arrangements;
"income from investing activities" includes dividend, interest, royalty
and any other income of similar nature;
"income tax" means any tax chargeable under Chapters Two and Three
of this Act;
"incubator" is as defined in the Nigeria Startup Act, No. 32, 2022;
"instrument" includes any document relating to transactions consum-
mated through conventional, electronic or other means;
"insurance" includes assurance;
"investor in gas pipeline" means a person issued a gas transportation
pipeline licence by the Nigerian Midstream and Downstream Petroleum
Regulatory Authority, with the exclusive right to own, construct, operate
and maintain a gas transportation pipeline within a route, for its own account
and with third party access provisions, or as a common carrier;
"itinerant worker" includes an individual, irrespective of his status, who
works at any time in any state during a year of assessment, other than as a
government security officer, for wages, salaries or livelihood by working in
more than one State and work for a minimum of 20 days in at least three
months of every assessment year;
"invoice" includes any document issued as evidence of demand for
payment;
"labelled startup" is as defined in the Nigeria Startup Act No. 32, 2022;
"land" means the earth's crust, or parcelled plots;
"lender'' means an approved lender in a regulated securities lending
transaction;
"manufacturer" means any person who engages in the production of
goods who manufactures for or on behalf of other persons;
"manufacturing" means a process by which a commodity is finally
produced, including assembling, bottling, mixing, blending, grinding, cutting,
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bending, twisting and joining or any other similar activity;
"Minister" means the Minister responsible for finance;
"minimum effective tax rate" means rate of 15% ;
"mining operations" means any trade or business, other than petroleum
operations, involving the exploitation or extraction of mineral resources
situated in the territory of the Federal Republic of Nigeria;
"MNE" means multinational enterprise;
"MNE group" means any group that includes two or more enterprises
the tax residence for which is in different jurisdictions, or includes an enterprise
that is resident for tax purposes in one jurisdiction and is subject to tax with
respect to the business carried out through a permanent establishment in
another jurisdiction;
"mortgage" means a security by way of deposit of real property for the
payment of any definite and certain sum of money advanced including any
agreement accompanied with a deposit or pledging of title deeds for making
a mortgage, or any other security of any land, estate, or property comprised
in title deeds;
"multinational enterprise" means a company that carries on business
in more than one country or jurisdiction through subsidiary companies,
associated companies, permanent establishments or any other business units
located in those countries or jurisdictions;
"multinational group" means MNE group;
"National Minimum Wage" means the extant minimum wage prescribed
by the National Minimum Wage (Amendment) Act 2024;
"Nigeria" means the Federal Republic of Nigeria, and when used in a
geographical sense, includes the territorial waters of the Federal Republic
of Nigeria, and any area outside the territorial waters, including the continental
shelf, which in accordance with international law has been or may be
designated, under the law of the Federal Republic of Nigeria, as an area
within which the right of the Federal Republic of Nigeria with respect to the
seabed, its subsoil, its superjacent waters and their natural resources may
be exercised now and in the future;
"Nigerian company" means a company –
(a) formed, registered or incorporated under any law in Nigeria;
(b) whose central place of management or control is Nigeria; or
(c) whose effective place of management or control is Nigeria;
"non-resident" means non-resident person, individual or company, as the
context requires;
"non-resident individual" means an individual that, in any year of
assessment –
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(a) is not domiciled in Nigeria;
(b) has no permanent place available for his domestic use in Nigeria;
(c) has no place of habitual abode in Nigeria;
(d) has no substantial economic and immediate family ties in Nigeria;
(e) sojourns in Nigeria for a period or periods amounting to an aggregate
of less than 183 days in a 12-month period inclusive of annual leave or
temporary period of absence ; and
(f) is not serving as a diplomat or diplomatic agent of Nigeria in another
country.
"Official Gazette" means the Federal Government Gazette or the Gazette
of any State in the Federation;
"official market rate" means currency exchanged market approved by
the Central Bank of Nigeria;
"operating lease" means an arrangement involving the transfer of the
right to use an asset by the lessor in return for rental payments from lessee
over an obligatory period but the asset is not wholly amortised during the period;
"owner" means in respect of any goods, aircraft, vessel, vehicle, plant or
any other goods, a person, other than an officer acting officially or agent, who
holds out himself to be the owner, or the person in possession of beneficial
interest in, or having control of or power of disposition over the goods, aircraft,
vessel, vehicle, plant or other goods;
"participation, directly or indirectly, in the management, control, or
capital of the other person" means where a person either alone or together
with an associate or associates under another application of this section controls
either directly or through one or more interposed persons, 30% or more of the
voting right, the right to dividends or income entitlements payable or the right to
capital in another person;
"partnership" means an association, or a body of two or more persons
who have agreed to combine their rights, powers, property, labour or skill for
the purpose of carrying on a trade or business and sharing the profit;
"permanent establishment" means taxable presence of a non-resident
person, and shall include permanent establishment as defined in section 17 of
this Act;
"permissible by-products" means goods or services described in a cer-
tificate issued under section 171 of this Act being goods or services necessar-
ily or ordinarily produced in the course of producing a priority product;
"person" includes a company, partnership, community, family, individual,
executor, trustee and legal arrangement;
"personal representatives" means the legal personal representatives of
a deceased person;
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"policy of insurance" means an instrument by which a contract of
insurance is made or agreed to be made, or is evidenced, excluding cover
notes, slips or other documents made in anticipation of the issue of an insurance
policy, and documents embodying alterations of the terms or conditions of an
insurance policy, and the expression "insurance" includes assurance ;
"policy of life insurance" means a policy of insurance upon any life or
lives or upon any event or contingency relating to or depending upon any life or
lives;
"policy of insurance against personal injury" means a policy of in-
surance for any payment agreed to be made as compensation for personal
injury, including policies of insurance or indemnity against liability incurred by
employers in consequence of claims made upon them by workmen who have
sustained personal injury;
"policy of marine insurance" means any formal contract whereby an
insurer undertakes to indemnify an insured against losses incident to marine
adventure, and includes any contract relating to insurance of a ship or the
machinery or fittings belonging to the ship while under construction or repair or
on trial;
"priority company" means a company issued an economic develop-
ment incentive certificate;
"priority business" in relation to a priority company, means the produc-
tion and sale of its relevant priority product or products;
"priority industry" means any trade or business of any kind specified in
the Tenth Schedule to this Act;
"priority product" means goods or service of any kind specified in the
Tenth Schedule to this Act;
"professional services" means services provided by an individual or a
firm having specialised knowledge, skills, and qualifications in specific fields,
including consulting, planning, or support services, excluding artisans or
vocational services;
"public character" with respect to any organisation or institution means
organisation or institution –
(a) that is registered in accordance with relevant law in Nigeria; and
(b) does not distribute or share its profit in any manner to members or
promoters;
"public fund" means any fund set up by any government or a govern-
mental body in Nigeria to finance a specific service, project, or obligation of
Government to the public;
"real estate investment company'' means a company duly approved by
the Securities and Exchange Commission to operate as a real estate investment
scheme in Nigeria;
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"receipt" includes a note, memorandum, writing or electronic inscription
whereby money, a bill of exchange or promissory note for which money is
acknowledged or expressed to have been received, deposited or paid, or whereby
a debt or demand, or any part of a debt or demand is acknowledged to have
been settled, satisfied or discharged, or which signifies or imports any such
acknowledgement, and whether the same is or is not signed with the name of
a person;
"regulated securities lending transaction'' means any Tenth Schedule
securities lending transaction conducted under rules made by the Securities
and Exchange Commission;
"related parties" has the same meaning as connected persons, and
unconnected, non-related or unrelated party shall be construed accordingly;
"relative" means brother, sister, ancestor or lineal descendant;
"relevant priority product" in relation to any priority company, means
priority product and the permissible by-products specified in a priority certificate;
"relevant tax authority" is in accordance with the provision of this Act
and section 3 of the Nigeria tax Administration Act, 2025 ;
"remainder of assessable income" means the total assessable income
of an individual less the deductions under section 28(2) of this Act;
"remainder of assessable profit" means the total assessable profit of a
company less the deductions under section 27(5) of this Act, in the case of a
company;
"rent" means payments of any kind, received or receivable, paid or
payable, for the use of, or the right to use property or equipment of any kind,
and shall include remuneration for the use, letting, hire or use in any other form
of movable or immovable property;
"resident" means resident person, individual or company;
"resident company" means a Nigerian company;
"resident individual" means an individual that, in any year of
assessment –
(a) is domiciled in Nigeria ;
(b) has a permanent place available for his domestic use in Nigeria ;
(c) has place of habitual abode in Nigeria;
(d) has substantial economic and immediate family ties in Nigeria;
(e) sojourns in Nigeria for a period or periods amounting to an aggregate
of not less than 183 days in a 12-month period inclusive of annual leave or
temporary period of absence; or
(f) serves as a diplomat or diplomatic agent of Nigeria in another country;
"royalties" includes payments of any kind, received as a consideration
for–
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(a) the use of, or the right to use –
(i) any copyright (including the copyright of literary, artistic, scientific
work, broadcasts, motion picture films and works on films, films or other
means of image or sound transmission or reproduction for use in connec-
tion with radio or television broadcasting),
(ii) any patent, trademark, design or model, plan, or secret formula or
process ; or
(iii) industrial, commercial or scientific equipment ; or
(b) information concerning industrial, commercial or scientific experi-
ence; or
(c) for the use of, or the right to use, any software, or paid as a consideration
for the acquisition of any copy of software for the purposes of using it.
"Service'' means the Nigeria Revenue Service established under Nigeria
Revenue Service (Establishment) Act, 2025;
"services" for the purposes of Part IV of Chapter Eight of this Act,
means –
(a) anything, other than goods, or services provided under a contract of
employment; and
(b) includes any intangible or incorporeal (product, asset or property)
over which a person has ownership or rights, or from which he derives benefits,
and which can be transferred from one person to another;
"small company" means a company that earns gross turnover of
N 50,000,000 or less per annum with total fixed assets not exceeding
N 250,000,000, provided that any business providing professional services shall
not be classified as a small company;
"supplies" means any transaction, whether it is the sale of goods or the
performance of a service for a consideration;
"supply of goods" means any transaction where the property in the
goods is transferred or where the agreement expressly contemplates that this
will happen and in particular includes the sale and delivery of taxable goods,
the letting out of taxable goods on hire or leasing, and any disposal of taxable
goods;
"supply of services" means any service provided for a consideration;
"tax" means any imposition, duty, levy, royalty or revenue accruing to
government in full or in Part under this Act or any other law ;
"tax ID" is as provided for under Nigeria Tax Administration Act, 2025;
"taxable person" includes a company, individual or body of individuals,
family, community, corporations sole, trustee, executor or any other legal
arrangement, or any person who earns income, or carries out an economic
activity, a person exploiting tangible or intangible property for the purpose of
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obtaining income therefrom by way of trade or business, or any person or
agency of government acting in that capacity;
"taxable supplies'' means any transaction for sale of goods or the
performances of a service, for a consideration;
"trade or business" means any activity or venture from which income
is generated, for whatever scale or period it is carried on, but does not include
employment ;
"transaction at arm's length" means a transaction on normal open
market commercial terms;
"vehicle" includes for the purpose of this Act every description of
conveyance for the transportation by land of human beings or goods ;
"venture capitalist" is as defined in the Nigeria Startup Act No. 32,
2022;
"vessel" means a mode of transportation or conveyance by water, of
human beings or goods ; and
"year of assessment" means government tax year being 1 January to 31
December of any year.