Section 63 Nigeria Tax Act 2025

Section 63 of the Nigeria Tax Act 2025 is about Collective investment scheme. It provides as follows:

(1) Where under the provisions of the Investments and Securities Act, a mutual fund is established for the purpose of providing facilities for the participation of the public, as beneficiaries under a trust, in profits or income arising from acquisition, holding, management or disposal of securities or any other property, chapter two of this Act shall, in respect of the income arising to the trustees of a collective investment, have effect as if the –

(a) trustees were a company whose business consists mainly in the making of investments and the principal part of whose income is derived from it;
(b) rights of the unit holders were shares in the company; and
(c) income accruing to the trustees as is available for payment to the unit holders were dividends on such shar es, and reference to a company in this Act shall include a collective investment scheme.

(2) For the purpose of section 27 of this Act, the profits of an authorised collective investment scheme, on which tax, may be imposed, shall be ascertained by taking the income accruing to the trustees from all the
investments of the scheme and deducting there from sums disbursed as management expenses, including remuneration for the managers.

(3) Where the trustees of a scheme receive a payment on which the scheme suffers tax by deduction, not being franked investment income, the tax deducted shall constitute an advance payment of income tax and shall be setoff against income tax assessment for that year of assessment in ascertaining
the tax payable by the mutual fund or scheme.

(4) The profit accruing to the trustees of a collective investment that is
available for payment to unit holders or for investment shall be deemed to be dividends paid or payable by the trustees to the unit holders in proportion to
their rights, and shall be taxed in the hands of the unit holders.

(5) In this section –
“authorised collective investment” means a scheme that is authorised by the Securities and Exchange Commission under the Investment and Securities Act to carry on the business of dealing in a mutual fund scheme or collective investment scheme;

“collective investment scheme” means any arrangement made for the purpose of providing facilities for the participation of the public as beneficiaries under a trust in profits or income arising from the acquisition, holding, management or disposal of securities or any other property;

“scheme” means authorised collective investment; trustee” under a collective investment scheme means the person in whom the property for the time being subject to any trust created under the scheme is or may be invested in accordance with the terms of the trust; and

“unit holder” means any investor, beneficiary or person who acquired units in a scheme and who is entitled to a share of the investments subject to the trusts of a scheme.

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