Section 98 Nigeria Tax Act 2025

Section 98 of the Nigeria Tax Act 2025 is about Chargeable profits and capital allowances. It provides as follows:

(1) The chargeable profits of a company of 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.

(2) There shall be computed the aggregate amount of all allowances due to the company under the provisions of Part III of the First Schedule to this Act for the accounting period.

(3) In calculating the amount of the deduction to be allowed under this section for an accounting period, the limitation imposed by subsection(4) shall be applied to ensure that the tax chargeable on the company for that period is not less than 15% of the tax chargeable for the period, where no deduction is made under this section.

(4) The amount to be allowed as a deduction under this section shall be, the lower of –
(a) the aggregate amount computed under subsection (2); or
(b) a sum equal to 85% of the assessable profits of the accounting period less 170% of the total amount of the deduction allowed as petroleum investment allowance computed under Part III of the First Schedule to this Act for the period.

(5) Where the total amount of the allowances computed under subsection (2) cannot be deducted under subsection (1) due to insufficiency of or no assessable profits for the accounting period or to the limitation imposed by subsection (4) the total amount or the part which has not been deducted, shall be –

(a) added to the aggregate amount to be computed under subsection (2) for the succeeding accounting period of the company; and
(b) deemed to be an allowance due to the company, under the provisions of Part III of the First Schedule to this Act for that succeeding accounting period.

(6) 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 III of First Schedule to this Act.

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