Section 69

Subject to this Part, for the purpose of ascertaining the adjusted profit
not allowed of a company in the accounting period from its upstream petroleum operations
applicable to crude oil, no deduction shall be allowed in respect of –
(a) expenditure for the purchase of information relating to the existence
and extent of petroleum deposits, other than for the acquisition of geophysical,
geological and geochemical data and information;
(b) expenditure incurred as a penalty, natural gas flare fees or imposition
relating to natural gas flare;
(c) financial or bank charges, arbitration and litigation costs, bad debts
and interest on borrowing;
(d) head office or affiliate costs, shared costs, research and develop-
ment costs or any other like shared indirect production costs;
(e) production bonuses, signature bonuses paid for the acquisition of, or
of rights in or over, petroleum deposits, bonuses or fees paid for renewing
petroleum mining lease or petroleum prospecting licence or marginal field or
fees paid for assigning rights to another party;
(f) tax inputted into a contract or an agreement on a net of tax basis and
paid by a company on behalf of the vendor or contractor;
(g) capital withdrawn or sum employed or intended to be employed as
capital;
(h) capital employed in improvements as distinct from repairs;
(i) sum recoverable under an insurance or contract of indemnity, except
an amount that is not recovered under the scheme;
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(j) rent of or cost of repairs to any premises or part of premises not
incurred for the purpose of those operations;
(k) amounts incurred in respect of any income tax, special tax,
development levy, profits tax or other similar taxes, whether charged within
Nigeria or elsewhere;
(l) the depreciation of any premises, buildings, structures, works of a
permanent nature, plant, equipment, machinery, furniture or fixtures;
(m) payment to provident, savings, widows and orphans or other society,
scheme or fund;
(n) any contribution to a pension, provident or other society, scheme or
fund for production staff which may be approved, with or without retrospective
effect, by the National Pension Commission subject to such general conditions
or particular conditions, in the case of the society, scheme or fund as the
Service may prescribe, provided that any sum received by or the value of
any benefit obtained by the company from any approved pension, provident
or other society, scheme or fund, in the accounting period of that company
shall, for the purpose of section 68 (2) of this Act, be treated as income of
the company for that accounting period;
(o) all customs duties;
(p) any expense on which Value Added Tax is due under this Act but not Sixth
charged, or in the case of imported items, any expense on which the applicable Schedule
import duty or levy was not paid; and
(q) costs under paragraph 2(2)(c) of the Sixth Schedule to this Act.