- 6 Marks
AT – Nov 2024 – L3 – Q2a – Tax Treatment of Decommissioning Funds in Petroleum Operations
Explain the tax treatment of decommissioning funds in petroleum operations.
Question
A Decommissioning Fund has been created to help restore the environment to its original state after petroleum operations. The upstream contractors are required to contribute towards the fund, while the government takes up the responsibility of the decommissioning activities after the operations.
Required:
Explain the tax treatment of decommissioning funds in petroleum operations.
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