Section 4 Nigeria Tax Act 2025

Section 4 of the Nigeria Tax Act 2025 is about Income, profits or gains chargeable to tax. It provides as follows:

(1) Income, profits or gains of a person accruing in or derived from Nigeria, including –
(a) profits or gains from any trade, business, profession or vocation for whatever period of time such trade or business may have been carried on;

(b) royalties, fees, rents or interests arising from a right granted for the use, exploitation or occupation of any property;
(c) dividends, premium, charges or annuities;

(d) fees, dues, allowances, or any remuneration for services rendered;
(e) discounts or rebates;
(f) disposal of money or money instruments;
(g) income, profits or gains from disposal or lending of securities;

(h) prizes, winnings, honoraria, grants, awards, laurels, etc.;
(i) profits or gains from the disposal of property or fixed assets;
(j) profits or gains from transactions in digital or virtual assets; and
(k) any other income, profit or gain not falling within the preceding categories.

(2) Income, profits or gains of an individual, including –
(a) salaries, wages, fees, allowances, compensations, bonuses, premiums, benefits or other perquisites allowed, given or granted by any person to any employee other than payment for expenses incurred in the performance of the duties of the employment, and from which it is not intended that the employee should make any profit or gain; and
(b) any pension, annuity or any other similar income.

(3) Income of a family recognised under any law or custom in Nigeria as family income in which the several interests of individual members of the family cannot be separately determined, excluding income on inherited assets before distribution.

(4) Income arising to a trustee of any settlement or trust, or estate or to an executor of any estate of a deceased person.

(5) Any other income, profit or gain not falling within the preceding categories.

(6) For the purposes of this section –
(a) interest –
(i) accrues in Nigeria where the liability to its payment falls upon a resident of Nigeria or Nigerian permanent establishment of a non-resident person regardless of where or in what form the interest is paid,

(ii) includes, penal interests and any payment similar to interest, income from any government or corporate securities, bonds or debentures, premiums or prizes attaching to such securities, bonds or debentures, discounts, fees, premium, share of profit in non-interest finance arrangements, finance cost element in a finance lease, or foreign exchange differences arising in relation to securities, any payment in relation to derivatives used in hedging securities, or any other payment of similar nature,

(iii) in respect of debts, includes return on discounted papers, income from debt claims of every kind, whether or not secured by mortgage and whether or not carrying a right to participate in the debtor’s profits or foreign exchange differences arising in relation to a debt, and

(iv) in respect of regulated securities lending transactions, includes compensating payments received by a borrower from its approved agent or a lender, provided that the underlying transaction giving rise to the compensating payment is a receipt of interest by a lender on the collateral it received from its approved agent or a borrower;

(b) dividend includes, in relation to –
(i) a company that is not in the process of being wound up or liquidated, profits, in any form, shared or distributed to the shareholders, including an amount equal to the nominal value of bonus shares, debentures or securities awarded to the company’s shareholders,

(ii) a company that is being wound up or liquidated, any distribution, whether in money or money’s worth, earned before or during the winding up or liquidation, and