Section 264: Deductions not allowed.

Subject to this Act, for the purpose of ascertaining the adjusted profit 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 disbursements or expenses not being money wholly, reasonably, exclusively and necessarily incurred for the purpose of those operations;
b 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;
c expenditure incurred as a penalty, natural gas flare fees or imposition relating to natural gas flare;
d financial or bank charges, arbitration and litigation costs, bad debts and interest on borrowing;
e head office or affiliate costs, shared costs, research and development costs or any other like shared indirect production costs;
f 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;
g tax inputted into a contract or an agreement on a net tax basis and paid by a company on behalf of the vendor or contractor;
h capital withdrawn or sum employed or intended to be employed as capital;
i capital employed in improvements as distinct from repairs;
j sum recoverable under an insurance or contract of indemnity,
except an amount that is not recovered under the scheme;
k rent of or cost of repairs to any premises or part of premises not incurred for the purpose of those operations;
l amounts incurred in respect of tertiary education tax, companies income tax, any income tax, profits tax or other similar taxes, whether charged within Nigeria or elsewhere;
m the depreciation of any premises, buildings, structures, works of a permanent nature, plant, machinery or fixtures;
n payment to provident, savings, widows and orphans or other society, scheme or fund;
o 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 262 (1) of this Act, be treated as income of the company for that accounting period;
p all customs duties; and
q costs under paragraph 2 (2) (c) of the Sixth Schedule to this Act. [Sixth Schedule]