Section 71 Nigeria Tax Act 2025

Section 71 of the Nigeria Tax Act 2025 is about Chargeable profits and allowances. It provides as follows:

(1) The chargeable profits of a company for any accounting period shall be the amount of the assessable profits of that period after the deduction of any amount to be allowed in accordance with the provisions of this section as follows –
(a) the aggregate amount of capital allowances due to the company under the provisions of Part II of First Schedule to this Act for the accounting period;

(b) the aggregate amount of all production allowances due to the company under the provisions of the Sixth Schedule to this Act for the accounting period; and

(c) in the case of acquisition costs of petroleum rights, the value of the rights and the value of the assets acquired shall be reported separately to the Service, provided that the value of the rights shall be eligible for annual allowance of 20% per annum until it is fully written off and the value of the assets shall be depreciated based on the applicable depreciation rates for the respective assets under Part II of the First Schedule to this Act.

(2) In determining the chargeable profit, the total cost shall not exceed the cost-price ratio as determined in the Sixth Schedule to this Act.

(3) The chargeable profits and allowances shall be determined separately for the two classes of assessable profits under section 72 (a) and (b) of this Act.

(4) Where Value Added Tax is due under this Act but not charged on an asset, or in the case of an imported item, the applicable import duty or levy was not paid, the relevant expenditure shall not be eligible as a qualifying capital expenditure under the provisions of Part II of First Schedule to this Act.

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