Section 21 Nigeria Tax Act 2025

Section 21 of the Nigeria Tax Act 2025 is about Deductions not allowed. It provides as follows:

A deduction shall not be allowed for the purposes of ascertaining the profits or income from any trade, business, profession or vocation in respect of –

(a) capital repaid or withdrawn from a trade, business, profession or
vocation;
(b) any expenditure of a capital nature;
(c) domestic or private expense, or expenditure on assets not used for the purpose of trade, business, profession or vocation;

(d) any sum recoverable under an insurance or contract of indemnity;
(e) taxes on profit or incomes levied in Nigeria or elsewhere;
(f) any payment to a savings, widows and orphans, pension, provident or other retirement benefit fund, society or scheme not approved under the Pension Reform Act or any similar enactment in Nigeria;

(g) depreciation or impairment of any fixed asset, investment or an unrealised exchange difference on any item denominated in foreign currency;

(h) any sum reserved out of profits subject to the provisions of section 20(1)(h) of this Act;

(i) any payment to a connected person that is not consistent with the Transfer Pricing Regulations issued by the Service;
(j) any expense incurred in deriving an income that is exempt from income tax;

(k) any expense allowable as a deduction in determining chargeable gains under this Act;
(l) penalty or fine imposed under any law;
(m) any tax or penalty borne on behalf of another person;

(n) any compensating payment made by a borrower, which qualifies as dividends under this Act, to its approved agent or to a lender in a regulated securities lending transaction;

(o) any compensating payment made by an approved agent, which qualifies as interest or dividends under this Act, to a borrower or lender in a regulated securities lending transaction; or

(p) any expense on which Value Added Tax is due under this Act but was not charged, or in the case of imported items, any expense on which the applicable import duty or levy was not paid.

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