Topic: Tax Incentives and Reliefs

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ATAX – May 2023 – L3 – Q7 – Tax Incentives and Reliefs

Explore tax incentives for mining businesses, gas utilisation operations, and companies eligible for road infrastructure tax credit schemes.

Question

Tax incentives are special exclusions, exemptions, deductions, or credits offered by the government to encourage specified activities. These incentives have sparked debates among Nigerian lawmakers, economists, accountants, tax practitioners, and the public.

The Federal Government remains optimistic that the positive effects of tax incentives on the economy outweigh the potential revenue loss.

A prominent businessman and Chairman of High Level Group of Companies approached your firm to provide professional advice on tax incentives available for companies in specific sectors.

Required:

As the officer designated by your firm, prepare a report to the Principal Partner for review, explaining the tax incentives available to:

(a) Mining businesses under the Minerals and Mining Act 2007 (6 Marks)
(b) Gas utilisation (downstream operations) businesses (5 Marks)
(c) Companies eligible for the Road Infrastructure Tax Credit Scheme (4 Marks)

Answer

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Tags: Gas Utilisation, Infrastructure Tax Credit, Mining Industry, Tax Incentives
Level: Level 3

Topic: Tax Incentives and Reliefs

ATAX – Nov 2016 – L3 – Q5b – Tax Incentives and Reliefs

Calculates tax liabilities for a pioneer company and withholding tax on dividends during the pioneer period.

Question

Ajanaku Nigeria Limited was incorporated as a pioneer company on March 15, 2011, focusing on aluminum roofing sheets. It received a Pioneer Certificate with Production Day as July 1, 2011. Extracts from its Audited Financial Statements are as follows:

Gross dividends declared:

2013: N600,000
2014: N1,500,000

Withholding tax rate on dividends for these years is 10%. Ignore Minimum Tax provisions. The initial tax relief period was not extended.

You are required to:

Compute the tax liabilities for the relevant years of assessment relating to Pioneer Status only.
State the amount of Withholding Tax due from the shareholders. (11 Marks)

Answer

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Tags: Adjusted Profit, Dividends, Pioneer Status, Tax exemption, Withholding Tax
Level: Level 3

Topic: Tax Incentives and Reliefs

ATAX – Nov 2016 – L3 – Q5a – Tax Incentives and Reliefs

Lists industries qualifying for pioneer status under the Industrial Development (Income Tax Relief) Act 1971.

Question

One of the incentives available to industries in Nigeria is contained in the Industrial Development (Income Tax Relief) Act 1971, which grants tax holidays to companies in industries designated as “Pioneer Industries.”

You are required to:

a) State any FOUR industries that qualify to be regarded as Pioneer Industries. (4 Marks)

Answer

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Tags: Income Tax Relief, Industrial Development, Pioneer Industries, Tax Holidays, Tax Incentives
Level: Level 3

Topic: Tax Incentives and Reliefs

AT – May – 2018 – L3 – SC – Q7 – Tax Incentives and Reliefs

Information on corporate tax reliefs and incentives, with specific focus on start-ups and export-oriented businesses in Nigeria.

Question

Mr. Nwatakaibeya, who studied in Germany and had been working there for over 20 years, finally returned to Nigeria in 2015. He has saved some funds to start a new business and incorporated Nwatakaibeya Investments Limited in January 2016. However, since his return, he has been overwhelmed by reports of start-up and existing businesses that shut down due to harsh economic conditions.

He has read in newspapers that, as part of the government’s commitment to improve the ease of doing business in Nigeria, the Federal Government has periodically reviewed and enhanced reliefs and incentives available to corporate taxpayers. This has given him hope, and he is eager to gather more information to avoid potential challenges.

Given his concerns about the current business environment in Nigeria:

a. Explain briefly SIX reliefs and incentives available to corporate taxpayers. (12 Marks)
b. Outline THREE conditions a company must fulfill to qualify for tax incentives for export-oriented business. (3 Marks)

(Total 15 Marks)

Answer

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Tags: Corporate Incentives, Ease of Doing Business, Export Incentives, Federal Tax Policy, Tax Reliefs
Level: Level 3

Topic: Tax Incentives and Reliefs
Series: MAY 2018

ATAX – Nov 2018 – L3 – Q4a – Tax Incentives and Reliefs

Explanation of Foreign Direct Investment and incentives for foreign investors in Nigeria.

Question

(a) Write a short note on Foreign Direct Investment (FDI) and incentives available to foreign investors in Nigeria.

Answer

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Tags: Economic growth, FDI, Foreign Investment, Incentives, Investment Protection, Nigeria, Tax Reliefs
Level: Level 3

Topic: Tax Incentives and Reliefs

TAX – May 2023 – L2 – SC – Q7 – Tax Incentives and Reliefs

Explain tax incentives and penalties for enterprises in export processing zones.

Question

The Federal Government in a bid to further boost the growth in foreign exchange earnings, create new jobs, facilitate economic diversification, industrialization, and provide access to foreign technology, came up with its export processing zones (EPZs) policy.

EPZ is regarded as a customs area where an enterprise is allowed to import plant, machinery, equipment, and raw materials, process them, and then export them to the world market, under security and without paying duty.

To facilitate a better understanding of the above assertions, the Managing Director of a would-be client approached you for explanations of the relevant provisions of the Nigerian Export Processing Zones Act Cap. N107 LFN 2004 (as amended) and Companies Income Tax Act Cap. C21 LFN 2004 (as amended).

Required:

a. Discuss SIX special tax incentives for enterprises operating in an export processing zone. (12 Marks)

b. Explain the penalties for non-compliance with section 55(1) of CITA (as amended). (3 Marks)

Answer

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Tags: CITA Penalties, Export Processing Zones, Foreign Investment, Tax Compliance
Level: Level 2

Topic: Tax Incentives and Reliefs
Series: MAY 2023

TAX – Nov 2020 – L1 – SA – Q1b – Tax Incentives and Reliefs

Explain current year loss relief and carry forward loss relief.

Question

A company that makes a loss from its trade or business is entitled to relieve such loss by carrying it forward for set-off against the assessable profits of subsequent assessment years commencing from the year following that in which the loss occurs.

Required:
Explain current year loss relief and carry forward loss relief.
(8 Marks)

Answer

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Tags: Carry Forward Loss, Current Year Loss, Loss relief, Tax Set-Off
Level: Level 1

Topic: Tax Incentives and Reliefs
Series: NOV 2020

TAX – Nov 2020 – L1 – SA – Q4 – Tax Incentives and Reliefs

Identify which taxpayers are not eligible to participate in VAIDS.

Question

Which of the following is NOT eligible to participate in the voluntary assets and income declaration scheme (VAIDS)?
A. Those that earned income or owned assets but were yet to register with the relevant tax authorities
B. Registered taxpayers who had additional disclosures to make or needed to amend prior disclosures; and/or were registered but were not filing returns
C. Taxpayers that were not fully declaring their taxable income and assets
D. Taxpayers that were underpaying or under remitting their taxes
E. Taxpayers that were engaged in tax disputes with the relevant tax authorities but were not prepared to settle the tax disputes out of court

Answer

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Tags: Tax Compliance, Taxpayer Eligibility, VAIDS, Voluntary Disclosure
Level: Level 1

Topic: Tax Incentives and Reliefs
Series: NOV 2020

TAX – Nov 2021 – L2 – Q4b – Tax Incentives and Reliefs

Explanation of the rules governing loss relief for companies, including carry forward, loss limitation, and cessation rules.

Question

Explain FIVE rules governing loss relief for companies.

Answer

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Tags: Corporate Losses, Loss relief, Tax Rules
Level: Level 2

Topic: Tax Incentives and Reliefs
Series: NOV 2021

TAX – May 2021 – L1 – SB – Q4b – Tax Incentives and Reliefs

Identification of tax incentives for enterprises operating in Nigeria's free trade zones.

Question

Mr. James Adegun has been in Japan for so many years. There is pressure from his parents in Nigeria to return to the country to take advantage of so many favourable economic policies being put in place by the government. Mr. James Adegun had a sudden meeting with you sometime in 2019 and intimated you of his desire to return to Nigeria. He was of the opinion that his business associates in Japan would be willing to invest in a free trade zone in Nigeria.

Required:
State SIX special tax incentives for enterprises operating in a free trade zone in Nigeria.

Answer

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Tags: Economic Policies, Enterprises, Free Trade Zone, Tax Incentives
Level: Level 1

Topic: Tax Incentives and Reliefs
Series: MAY 2021

ATAX – May 2023 – L3 – Q7 – Tax Incentives and Reliefs

Explore tax incentives for mining businesses, gas utilisation operations, and companies eligible for road infrastructure tax credit schemes.

Question

The Federal Government remains optimistic that the positive effects of tax incentives on the economy outweigh the potential revenue loss.

A prominent businessman and Chairman of High Level Group of Companies approached your firm to provide professional advice on tax incentives available for companies in specific sectors.

Required:

As the officer designated by your firm, prepare a report to the Principal Partner for review, explaining the tax incentives available to:

(a) Mining businesses under the Minerals and Mining Act 2007 (6 Marks)
(b) Gas utilisation (downstream operations) businesses (5 Marks)
(c) Companies eligible for the Road Infrastructure Tax Credit Scheme (4 Marks)

Answer

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Tags: Gas Utilisation, Infrastructure Tax Credit, Mining Industry, Tax Incentives
Level: Level 3

Topic: Tax Incentives and Reliefs

ATAX – Nov 2016 – L3 – Q5b – Tax Incentives and Reliefs

Calculates tax liabilities for a pioneer company and withholding tax on dividends during the pioneer period.

Question

Gross dividends declared:

2013: N600,000
2014: N1,500,000

Withholding tax rate on dividends for these years is 10%. Ignore Minimum Tax provisions. The initial tax relief period was not extended.

You are required to:

Compute the tax liabilities for the relevant years of assessment relating to Pioneer Status only.
State the amount of Withholding Tax due from the shareholders. (11 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Adjusted Profit, Dividends, Pioneer Status, Tax exemption, Withholding Tax
Level: Level 3

Topic: Tax Incentives and Reliefs

ATAX – Nov 2016 – L3 – Q5a – Tax Incentives and Reliefs

Lists industries qualifying for pioneer status under the Industrial Development (Income Tax Relief) Act 1971.

Question

You are required to:

a) State any FOUR industries that qualify to be regarded as Pioneer Industries. (4 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Income Tax Relief, Industrial Development, Pioneer Industries, Tax Holidays, Tax Incentives
Level: Level 3

Topic: Tax Incentives and Reliefs

AT – May – 2018 – L3 – SC – Q7 – Tax Incentives and Reliefs

Information on corporate tax reliefs and incentives, with specific focus on start-ups and export-oriented businesses in Nigeria.

Question

Given his concerns about the current business environment in Nigeria:

(Total 15 Marks)

Answer

Find Related Questions by Tags, levels, etc.

Tags: Corporate Incentives, Ease of Doing Business, Export Incentives, Federal Tax Policy, Tax Reliefs
Level: Level 3

Topic: Tax Incentives and Reliefs
Series: MAY 2018

ATAX – Nov 2018 – L3 – Q4a – Tax Incentives and Reliefs

Explanation of Foreign Direct Investment and incentives for foreign investors in Nigeria.

Question

(a) Write a short note on Foreign Direct Investment (FDI) and incentives available to foreign investors in Nigeria.

Answer

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Tags: Economic growth, FDI, Foreign Investment, Incentives, Investment Protection, Nigeria, Tax Reliefs
Level: Level 3

Topic: Tax Incentives and Reliefs

TAX – May 2023 – L2 – SC – Q7 – Tax Incentives and Reliefs

Explain tax incentives and penalties for enterprises in export processing zones.

Question

Required:

a. Discuss SIX special tax incentives for enterprises operating in an export processing zone. (12 Marks)

b. Explain the penalties for non-compliance with section 55(1) of CITA (as amended). (3 Marks)

Answer

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Tags: CITA Penalties, Export Processing Zones, Foreign Investment, Tax Compliance
Level: Level 2

Topic: Tax Incentives and Reliefs
Series: MAY 2023

TAX – Nov 2020 – L1 – SA – Q1b – Tax Incentives and Reliefs

Explain current year loss relief and carry forward loss relief.

Question

Required:
Explain current year loss relief and carry forward loss relief.
(8 Marks)

Answer

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Tags: Carry Forward Loss, Current Year Loss, Loss relief, Tax Set-Off
Level: Level 1

Topic: Tax Incentives and Reliefs
Series: NOV 2020

TAX – Nov 2020 – L1 – SA – Q4 – Tax Incentives and Reliefs

Identify which taxpayers are not eligible to participate in VAIDS.

Question

Answer

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Tags: Tax Compliance, Taxpayer Eligibility, VAIDS, Voluntary Disclosure
Level: Level 1

Topic: Tax Incentives and Reliefs
Series: NOV 2020

TAX – Nov 2021 – L2 – Q4b – Tax Incentives and Reliefs

Explanation of the rules governing loss relief for companies, including carry forward, loss limitation, and cessation rules.

Question

Explain FIVE rules governing loss relief for companies.

Answer

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Tags: Corporate Losses, Loss relief, Tax Rules
Level: Level 2

Topic: Tax Incentives and Reliefs
Series: NOV 2021

TAX – May 2021 – L1 – SB – Q4b – Tax Incentives and Reliefs

Identification of tax incentives for enterprises operating in Nigeria's free trade zones.

Question

Required:
State SIX special tax incentives for enterprises operating in a free trade zone in Nigeria.

Answer

Find Related Questions by Tags, levels, etc.

Tags: Economic Policies, Enterprises, Free Trade Zone, Tax Incentives
Level: Level 1