Tax Implication Of Interest On Foreign And Domestic Loan Under The Company Income Tax Act (Amended) By Finance Act 2019.

By Zhihwi Dauda Esq.

*ABSTRACT

On 10^th of September, 2020 G. Mathew a Ph.D  research student of the University of Jos published a well researched article titled “Legal Requirements For Granting And Acquiring Foreign Loan In Nigeria: Where Nigeria Missed It Before Signing The Loan Agreement With Chinese Exim Bank”[1] This article provided the fulcrum for this paper and this  is discernable from the similarities in the premise for the discourse. The aim of this work therefore is to examine the various tax incentives, tax implication and tax treatment of interests on loan received by the lending Company and those paid by the borrowing company under the Companies Income Tax Act (CITA)[2]. This research shows that interests on certain loans are conditionally exempted from tax as incentive, while others are exempted fully. The work found out that with effect from 2^nd April,1978 all interest received on foreign loans granted to Nigerian companies are taxable, whether or not the loan was used for legal or illegal business, and the President has the power to exempt any company from payment of any income tax under CITA. The work recommended the need to amend the tax laws to address the absolute power vested on the President to exempt companies from payment of tax under CITA, and subject same power to public policy and interest. It was further recommended that more incentive on exemption of interest on loan for Small and Medium Enterprises (SME) and mortgage loans be introduced in CITA to promote industrial development in Nigeria. Also the Federal Government should domesticate OECD BEPS Action 4. In conclusion, it was emphasized that the government and tax Authority have a duty to ensure that taxation is used as a good fiscal policy instrument to balance the equation in ensuring that corporate tax revenue is not eroded via excessive interest rate and interest repayment on loan which are tax deductible and at the same time ensure that Companies are not starved of funding through debt financing as a result of draconian tax laws or regulations.

• INTRODUCTION

Every business is required by the relevant tax law to render a Return of its transactions annually for each year of assessment to the relevant Tax Authority. These Returns are prepared purely on commercial basis and will require adjustments in line with the provision of Companies Income Tax Act before an assessment is raised.[3] Therefore, Companies in Nigeria are statutorily required to pay a certain percentage of their profit accruing, derived, brought into and or received in Nigeria as Company Income Tax.[4]

It is worthy to note that under the self assessment regime, companies can compute their tax assessment, file their tax returns and proceed to pay their determined tax. However, the Tax Authority which in this case is the Federal Inland Revenue Service (FIRS) has provided procedures to determine whether the actual tax was paid or not. In practice, while the Company’s Financial Statements are mostly prepared by a licenced Chartered Accountant (ICAN or ANAN Members), the computation of the tax liability are in most cases done by a licenced Chartered Tax Practitioner (CITN Members) on behalf of the tax payer, though there is no law that prevents the tax payer from preparing it himself.

The Companies Income Tax Act has provided a set of rules which FIRS uses for determination of a company’s actual tax liability in all cases, this includes adding back to profits all expenses that are not admissible as allowable deductions known as Non Allowable Deductions These include: Any expenditure of capital nature,[5] any sum recoverable under insurance or  contract of indemnity,[6] any taxes on income or profit levied in Nigeria or outside Nigeria where there is no Double taxation Agreement (DTA),[7] any payment to saving, widows, orphan  and also pension, provident or other retirement benefit except as permitted by Section 24(g)CITA,[8] The depreciation of any asset,[9] any sum reserved out of profit except as permitted under S.24 (f) CITA which is on bad and double debt. Or under S, 25 CITA which is allowable donations to public fund or NGO listed in the 5^th schedule of CITA,[10] any management fee paid outside Nigeria except there is prior approval of the agreement by the minister of finance,[11] any expenses incurred outside Nigeria for and on behalf of the company except it is of nature to the extent as the board may consider allowable.[12]

The expenses that are admissible as deductions are called allowable deductions. These are deductions made before computing taxable profit which must be an expense incurred wholly, exclusively, necessarily and reasonably in the production of those profits that are deductible.[13] The Court held in Chief F.R.A. Williams vs. RTB (2012)[14] that “The general rule is that an item of expense shall be deducted in computing the profit of a trade if its deduction would be justified on business or accounting principles, but that, if a particular kind of deduction is statutorily prohibited, the deduction cannot be made even though it would be proper to make from the point of view of commercial accountancy”. The Tax Authority allows deductible expenses as admissible for deductions from the company’s profit. However, it was decided by The Body of Appeal Commission (BAC) in the case of Otis of Nigeria Limited V FBIR[15] that “a company claiming tax deduction must prove the necessary fact.”

Allowable expenses help to reduce the amount of tax a company should pay. Allowable deductions include:[16] Any sum payable by way of interest on any money borrowed and employed as capital in acquiring the profits,[17] Rent for the period of assessment (residential rent for employee to a maximum of 100% of the basic salary),[18] Salary, wages or other remuneration or allowance paid to the senior staff and executives,[19] expenses for repair of premises, plant, machinery, or fixture employed in acquiring profit,[20] bad and double debt, provided when they are paid in the future it will be added to the profit of that year.[21] Any pension contribution, provident or other retirement benefit funds as approved by JTB under,[22] all allowable deduction allowed under Nigerian Railway Corporation rules,[23] any expenses that is wholly, exclusively, Necessary and Reasonably incurred in trade and business for profit making,[24] Expenses spent on research and development to the satisfaction of the board.[25] Levy paid to National Science and Technology fund which is not deductable under any provision of CITA[26] and other deductions as the Minister of Finance may prescribe by any rule.

In addition to the above, others include: Donation of amount equal to 10% of total profit of the company for that year (not for sponsorship of  expenditure of capital nature) are allowable deduction, but the President may by order in federal gazette increase what a company can donate in this regard[27] The Beneficiary of the donations are;[28] (Public fund, Statutory body & institution, Ecclesiastical, charitable, educational and all the 42 item mentioned in the 5^th Schedule of the CITA and any other institution or body the Minister of Finance may add by order in the Federal Gazette,[29] donation of amount equal to 10% of total profit or 25% of tax payable whichever is higher and it can be of sponsoring capital expenditure.[30] beneficiary of this donation are: University, Tertiary or Research Institution,[31] an amount equal to 10% of the total profit reserve for Research & Development before any deduction under section 25 CITA and 20% Investment tax credit on the qualifying expenditure is allowable to Companies that are engaged in Research and Development for commercial purpose[32]

Flowing from the above background, the questions that beg for answers are: Are the interests earned or received on loan exempted from tax?, are interests paid by company on loan repayment allowed to be deducted as expenses in its tax computation? are there any conditions precedent to the uses of such loans before interest paid or received on such loans can be allowed as allowable deduction or exempted from tax?, are there any incentives on interest for loan granted to particular sector of the Nigerian economy?, what is the tax implication of interest on loans generally? What is the treatment of interest on loans under the Company Income Tax Act?

In an attempt to answer the questions above, this paper will be structured as listed below:

1. Conceptual clarifications of certain terms.
2. The Legal framework on tax treatment of interest on loans.

• The tax treatment of interest on foreign and domestic loans.

1. The powers of the President in respect of exemption of company from paying tax under section 23(2) (a) & (b) CITA.
2. Challenges/limitations to the taxation of interest on loans.
3. Recommendations/way forward.

• Conclusion
• CONCEPTUAL CLARIFICATIONS OF TERMS USED

FOREIGN LOAN: In relation to any foreign company, Foreign Loan means any loan granted by a company with money brought into Nigeria from any territory or country outside Nigeria, or any loan granted by a company in any territory or country outside Nigeria, in a currency other than the Nigerian currency.[33]

DOMESTIC LOAN: (Also known as local loans). These are loan or credit facilities granted by a Nigerian bank, company, or any institution in Nigeria to another company or institution in any type of currency.

AGRICULTURAL LOAN: This is any loan granted by banks in Nigeria for any company engaged in “Agricultural trade or business” while “Agricultural trade or business”  means any trade or business connected with‐   (a)   the establishment or management of plantations for the production of rubber, oil palm, cocoa, coffee, tea and similar crops;   (b)   the cultivation or production of cereal crops, tubers, fruits of all kinds, cotton, beans, groundnuts, sheanuts, beniseed, vegetables, pineapples, bananas and plantains;   (c)   animal husbandry, that is to say, poultry, piggery, cattle rearing, fish farming and deep sea fish‐trawling;[34] 

COTTAGE INDUSTRY: means an industry where the creation of products and services is home‐based, rather than factory‐based.[35]

WORKING CAPITAL LOAN is a loan that is taken to finance a company’s everyday operations. These loans are not used to buy long-term assets or investments; instead they are used to provide the working capital that covers a company’s short-term operational needs. These needs include costs such as payroll, rent, and debt payments. This way, working capital loans are simply corporate debt borrowings used by a company to finance its daily operations.[36]

CORPORATE LOAN in tax parlance this means, any sum of money or thing (assets or materials of any kind) that is borrowed to a corporate entity and is expected to be paid back with interest at a given rate within a particular period of time.

MORATORIUM means a period at the beginning of a term loan during which the borrower is not expected to make any principal or interest repayment.[37]

REPAYMENT PERIOD as it relates to loan is the agreed tenure of the loan facility[38] (time within which the loan is to be paid fully).

TAX INCENTIVE is a government measure that is intended to encourage individuals and businesses to spend money or to save money by reducing the amount of tax they are required to pay. It is also an aspect of a country’s tax code designed as an incentive or encourages a particular economic activity by reducing tax payments for a company in the said country.[39]

TAX EXEMPTION is the reduction or removal of a liability to pay tax over a particular income/profit or general income by a tax payer that would otherwise be paid under the relevant tax law.

• LEGAL FRAMEWORK FOR THE TREATMENT OF INTEREST ON LOANS

The Laws governing the treatment of interests on loans as it relates to companies in Nigeria are: The grundnorm of the land, Item 59 Exclusive Legislative List, Part I, Second Schedule of the Constitution of FRN 1999 as Amended, which empowers the National Assembly to make laws on taxation of income of companies in Nigeria, Section 2, 25 & the 1^st Schedule to Federal inland Revenue Service (Establishment) Act 2007 (FIRSEA) which empowers the Federal Inland Revenue Service as the Competent Tax Authority to administer Taxation of income of company in Nigeria under CITA, Section 11 of the Companies Income Tax Act (CITA) Cap C21 LFN 2004 which provides for charge of tax on interest relating to foreign and agricultural loans, Section 23 of Finance Act 2019 which amended the third schedule of the CITA on chargeability of interest of foreign loan, Section 23(2) CITA which empowers the President to exempt any company from payment of tax from any source of income including interest on loan and any other Regulation issued under FIRSEA, and Case law (Judicial precedent).

• THE TAX TREATMENT OF INTEREST ON FOREIGN AND DOMESTIC LOANS

Interests on either foreign or domestic loans received by the lending companies are generally treated as income unless where such interests are expressly exempted under the CITA or any law. Equally, Interests paid by the borrowing companies on either foreign or domestic loan are generally expensed as allowable deduction to be deducted from the profit of the company. However it must be established that the loan (money borrowed) was employed as capital used wholly, exclusively, necessarily and reasonably for the production of profit of that company, otherwise such interest paid will be disallowed for deduction from the profit of such company before arriving at its tax liability.[40] The Tax Appeal Tribunal Abuja Division in the case of OANDO PLC V FIRS (2012)[41] held thus:

Interest incurred as a result of loan from NAL Bank PLC was not incurred wholly, exclusively, necessarily or reasonably for the production of the profit of the Appellant which were being ascertained. The cost of acquiring shares in another company cannot in any way be described as solely or inevitably incurred for the production of profit of an integrated energy provider. This is especially the case as there is no statutory obligation on the Appellant to make that purchase, which was in the SDPC v FBIR (2009)1 TLRN 224.consequently, Interest incurred as a result of the loan from NAL Bank Plc is not deductible, as it constitutes capital expenditure. An expense of a capital Nature is not deductible when calculating profit for income tax purpose. This is clearly contained in section 23 of CITA (now under Section 27(a) of CITA)

• INTEREST ON FOREIGN LOAN
  • THE GENERAL RULE: The general rule is that, interest on all foreign loans granted from 2^nd April, 1978 to date are taxable fully at the rate of 10% as withholding tax under Section 78 of the CITA.

S.23(2) (c) Finance Act 2019[42] which introduced the 7^th Schedule to CITA has provided a guiding principle for deductible interest paid on any foreign loan where connected persons are involved. The Finance Act[43]provided thus:

“Where a Nigerian Company, or a fixed base of a foreign company in Nigeria, incurs any expenditure by way of (payment of) interest or of similar nature in respect of debt (loan) issued by foreign connected person, the excess interest thereon shall be a disallowable deduction for the purpose of this Act.”

This has put an obligation on the tax authority (FIRS) to examine whether the foreign loan was granted between connected persons. The Act in Paragraph 6 of 7^th Schedule to CITA[44] further defines what connected persons means thus: “(i) any person controlled by or under common control, ownership or management, (ii) any person who is not connected but receives an implicit or explicit guarantee or deposit for the provision of corresponding or matching debt, or (iii) any related party as described under the Nigerian transfer pricing regulation 2018” Once the Tax authority is of the opinion based on the definition given above that the parties are connected persons, they shall disallow deduction on the excess interest thereon.

Interestingly, the Finance Act clarified the meaning of excess interest used in this context. Paragraph 2 of 7^th Schedule to CITA[45] provides thus:

“For the purpose of paragraph 1, the excess interest shall mean an amount of total paid or payable in excess of the thirty percent of earnings before interest, taxes, depreciation and amortization of the Nigerian Company in that accounting period”

However, a Nigerian subsidiary of a foreign company which is engaged in the business of banking or insurance is exempted from the application of Paragraph 1 of the 7^th Schedule of CITA[46]

Paragraph 5 of that 7^th Schedule of CITA as amended[47] has further provided for sanction against any person who violates the provision of the 7^th Schedule to CITA on deductible interest on foreign loans and such a person shall be liable to a penalty at 10% and interest at CBN monetary policy rate plus a spread to be determined by the Minister on any adjustments made by the FIRS relating to excess interest charge in any year.

It should be noted that as it was decided by the Body of Appeal Commissioners in the case of Western Nigeria Licensed Buying Agents Association v FBIR[48] that a deposit of money in bank does not amount to a loan to the bank, hence interest paid on such loan by the bank are taxable under Section 9 (c) of CITA and are therefore not exempted under Section 27 of CITA.

• THE EXCEPTION TO THE GENERAL RULE:

There is an exception to the general rule in respect of interest payable on any foreign loan granted on or before 1 April, 1978. Before the Finance Act 2019 came into force, interest on any foreign loan given to a Nigerian company for a tenure above 7years with a moratorium (grace period) of not less than 2years will be exempted from tax 100% under Company Income Tax Act,[49] while other interest on foreign loan attracts partial exemption as shown in the TABLE IFL 1 (Under CITA) below:

It is worthy to note that the Finance Act has introduced reduction in the percentages of the interest on foreign loans that are exempted from tax, one of which is the maximum exemption from tax of interest on foreign loan which has a repayment period and moratorium period of not less than seven years has now been reduced from 100% to 70%. Section 23(a) (i) of the Finance Act 2019 has amended the 3^rd Schedule of the CITA by updating the Table of tax exemption on interest on foreign loans thereby reducing the percentage of the exemption of interest on foreign loans from tax. See the table below:

TABLE IFL 2 (Under Finance Act) below:

If one carefully observes from 1^st April, 1978, to date is about 42 years, there may be few Foreign Loans if any, still running which was granted to any company before 1^st April, 1978 to which Table IFL 2 provided under the Finance Act above applies.

Worthy of mention also is that, the company which is the borrower of such foreign loan is entitled to dispense the interest paid on such loan as allowable expenses in the computation of its tax liability.

• INTEREST ON DOMESTIC LOAN GRANTED TO SOME SECTORS OF NIGERIA ECONOMY

The Companies Income Tax Act[50] provides that interest on any loan granted by a bank on or before 1^st January, 1977 to companies engaged in agricultural trade or business; or the fabrication of any local plant and machinery; or providing working capital for any cottage industry established by the company shall be exempted from tax fully. However it is subject to meeting certain conditions.

The Conditions for the exemption of such interest from tax are as   follows:[51]

1. If the moratorium period is not less than 18 months;
2. If rate of the interest is not more than the base lending rate (i.e. cost of fund to any bank from CBN);
3. They shall disclose to FIRS the following:
4. Amount of loan, Moratorium,
5. the date repayment is due to commence,
6. the amount of repayment showing capital and interest and
7. full particulars of the recipient of the loan and its permanent address).

This is one of the examples of deliberate use of taxation as fiscal policy by the Federal Government to serve as an incentive in order to encourage Foreign Direct Investment (FDI) and the development of the Nigerian agricultural sector. This is because the Nigerian agricultural sector is the major source of employment to over 70% of the teaming populace.

Therefore the income in form of interest receivable by Bans that grant such loans mentioned above are fully exempted from tax subject to fulfillment of the conditions listed above. Once the Tax authority discovers that the conditions mentioned above are not met, such interest will be treated as income and accordingly be subjected to tax at the appropriate rate provided under the Company Income Tax Act.

The Companies engaged in agricultural trade or business; or the fabrication of any local plant and machinery; or providing working capital for any cottage industry which is the borrower of such loan in this case will be allowed to dispense the interest paid on such loan as allowable expenses in the computation of their tax liability.

• INTEREST ON DOMESTIC LOAN FOR EXPORT MANUFACTURING COMPANY

The Companies Income Tax Act[52] provides that interest received on domestic loan granted by bank on or after 1^st April, 1980 to any company for the purpose of manufacturing goods for export shall be exempted from tax subject to certain conditions.

The Conditions for the exemption of such interest from tax are as   follows:[53]

1. Presentation of certificate issued by Export Promotion Council that the company has achieved the level of export provided.
2. Presentation of another certificate from Export Promotion Council signifying that not less than one half (50%) of its manufactured goods disposed of in its years of account is sold outside Nigerian and is not re-exported to Nigeria.

The international oil price in the early 1980’s triggered policy attention by Nigerian government to turn back to the manufacturing sector.[54] One of such policies was the introduction of incentives to Banks who are willing to lend money to companies engaged in manufacturing of export goods. Hence, subject to meeting up of certain conditions stated above, all income in form of interest receivable by banks on such loans are fully exempted from tax, and the companies who are the borrowers of such loans will dispense all interest paid on such loan to their lending banks as allowable expenses in the computation of their tax liability.

• INTEREST ON ALL PUBLIC LOAN

All Interest received as income on either foreign or domestic loan by bank or any foreign company which is classified as “Public Loans” (Meaning Loan to Federal, State or Local Government councils or any of its Agencies) are fully exempted from tax by the Income Tax Exemption (interest on Nigeria Public Loans) Notice of 1943[55]

• INTEREST ON LOAN GRANTED TO NIGERIAN RAILWAY CORPORATION (NRC) OR NIGERIA BROADCASTING CORPORATION (NBC)All Interest received as income on foreign loans granted by foreign banks or any foreign companies to Nigerian railway Corporation (NRS) or Nigeria Broadcasting Corporation are exempted from tax.[56]
• INTEREST ON BONDS AND SHORT TERM SECURITIES

By virtue of the power to exempt any income from tax conferred on the President of FRN under Section 23(2) CITA CAP C21 LFN2004, President Goodluck Jonathan made The Companies Income Tax (Exemption of Bonds and Short Term Government Securities) Order, 2011 which commenced from 2^nd January, 2012 and is for the duration of 10 years except Bonds issue by Federal Government which shall continue to enjoy such exemption indefinitely. By the said Order interests received or earned by holder (corporate bodies) of the following instruments are exempted from tax:

1. Interest on Short-Term Federal Government of Nigeria Securities,
2. Interest on bonds issued by State and Local Government and their agencies.

• Interest on bonds issued by corporate bodies including supranational.

This implies that the dividends of publicly traded REIT securities are exempt from withholding taxes (WHT) in the hands of the investors. Value Added Tax (VAT) and Capital Gains Tax (CGT) on sales of these units or securities are also not applicable. This exemption does not preclude the SPVs from paying CIT at 30% of their taxable income.[57]

However, incomes derived from investments in government securities and corporate bonds are deducted before arriving at the taxable incomes for CIT purposes in line with the ‘CIT Exemption of Profits Order, 2011

• THE POWER OF THE PRESIDENT TO EXEMPT ANY COMPANY FROM PAYING TAX UNDER CITA.

The President of the Federal Republic of Nigeria has the power to exempt by order the profit or income of any company as defined under Section 105 of CITA from payment of Income tax or exempt any company or classes of company/ies from compliance with any provision of CITA (which include but not limited to payment of income tax, withholding tax, registration and filing of Annual Returns etc) on any ground which appears to be sufficient to him. It is imperative to note that, what appears to be sufficient to the President is not subject to any conditions or question under the law as it is used in the Section. The President power in this context is absolute.

For the avoidance of doubt Section 23(2) (a) & (b) CITA provides Thus:

 The President may exempt by order- (a) any company or class of companies from all or any of  the provisions of this Act; or (b) from tax all or any profit of any company or class of companies from any source, on any ground which appears to it sufficient

Once the President has by order exempted any company or classes of company from payment of income tax, the income of such company automatically becomes “exempted income”. The Court in the case of Northern Nigeria Investment Ltd v FBIR (1976)[58] held

“Income which is exempted from taxation is income primarily subject to taxation under an enactment but which has been permitted to escape the tax not by another provision; it is not income subject to taxation”

• CHALLENGES/LIMITATION TO THE TAXATION OF INTEREST ON LOAN.

There are several factors limiting the effective taxation of interest on loans which amongst others include:

2. Excessive interest charged by companies involved in foreign loan granted between related companies.
3. Non disclosure of income by companies that are receiving income in form of interest on loan (particularly to individuals.)
4. Tax avoidance technique adopted by Banks and other Financial Institutions in hiding interest charged and received from short term loan like overdraft etc.
5. The challenge of thin capitalization which is an excessively high ratio of debt to equity in a corporation’s capital structure. This challenge was rightly observed by KPMG[59] that “the more debt a company has, the more obligation to make interest payment, the more tax deductible expense from a company’s earnings resulting from increased interest payment, this will lead to lower taxable income and ultimately lower revenue from corporate taxes for government.” As it is now, there is lacuna in Companies Income Tax Act as to the limit of how much loan a company can obtain generally or from its related parent company offshore.

5. Since payment of interest on loan are tax deductible, the excessive interest rate charged by many lending company or banks has the effect of eroding the profit base of the borrowing company and invariably affects the tax payable.

• RECOMMENDATIONS/WAY FORWARD. The writer after a careful examination of the challenges recommends the following:

1. That the Tax Authorities should adopts the use of technology in tracing and identifying loans between corporate bodies. They can develop a website for in-house use only, where all claims for tax deduction from interest paid on loan will be imputed by few selected desk officers in charge of such responsibility. The companies who are the beneficiaries of such interest can easily be traced too and ensure such income are subjected to tax.
2. That Companies Income Tax Act should be amended to exempt income received in form of interest from loan granted to small and medium Enterprise and interest on Mortgage loans. This will foster industrial development and remedy the housing deficit problem in Nigeria.
3. The writer agrees with KPMG’s view that “The Federal Government should domesticate the BEPS Action 4”, FIRS needs to come out with a Regulation as opposed to a Notice or circular domesticating the OECD BEPS Action 4 of 2018[60] on interest deduction, limiting base erosion. The rRgulation should incorporate the following:
   1. Arm’s length tests, which compare the level of interest or debt in an entity with the position that would have existed had the entity been dealing with third parties.
   2. Withholding tax on interest payments, which are used to allocate taxing rights to the source jurisdiction?

• Rules which disallows a specified percentage of the interest expense of an entity, irrespective of the nature of the payment or to whom it is made.

1. Rules which limit the level of interest expense or debt in an entity with reference to a fixed ratio, such as debt/equity, interest/earnings or interest/total assets.
2. Rules which limit the level of interest expense or debt in an entity with reference to the group’s overall position.
3. Targeted anti-avoidance rules which disallows interest expense on specific transactions.
4. The absolute powers vested on the office of the President FRN to exempt any companies from payment of any tax or application of any provision of CITA should be amended to be subject to public interest and policy.

• CONCLUSION: In an ideal commercial setting, corporate entities need funding to finance their businesses. The sources of financing by company can be obtained through either equity financing which is by issuing out share for sales to the public or through debt financing which is by obtaining either foreign or domestic loan to be paid with interest. The recent economic meltdown or recession has discouraged many Nigerians from investing in the capital market; hence it becomes difficult for companies to raise fund from equity. Debt financing has become the major source of financing for many companies in Nigeria.

The Government and Tax Authorities has a duty to ensure that taxation is used as a good fiscal policy instrument to ensure that corporate tax revenue is not eroded via excessive interest rate and interest repayment on loan which are tax deductible and also ensure that Companies are not starved of funding because of draconian tax laws or regulation on interest on loan.

[1] G. Mathew “Legal Requirements For Granting And Acquiring Foreign Loan In Nigeria: Where Nigeria Missed It Before Signing The Loan Agreement With Chinese Exim Bank” https://thenigerialawyer.com/legal-requirements-for-granting-and-acquiring-foreign-loan-in-nigeria-where-nigeria-missed-it-before-signing-the-loan-agreement-with-chinese-exim-bank/ Accessed on 27^th Sept, 2020.

Zhihwi Dauda Esq. (LL.B, B.L, LLM, ACIT), E-mail: daudathihwi@gmail.com Phone: 08059538671

[2] Companies Income Tax Act Cap C21 LFN 2004

[3] K.A Ishola “Taxation principles and fiscal policy in Nigeria” revised 2^nd Edi. Kastas publishers Nig Ltd Kwara State 2019. Pg 118

[4] S. 9 (1) Company Income Tax Act Cap C21 LFN 2004

[5] S. 27 (a) Company Income Tax Act Cap C21 LFN 2004

[6] S. 27 (b) Company Income Tax Act Cap C21 LFN 2004

[7] S. 27 (c) Company Income Tax Act Cap C21 LFN 2004

[8] S. 27 (d) Company Income Tax Act Cap C21 LFN 2004

[9] S. 27 (e) Company Income Tax Act Cap C21 LFN 2004

[10] S. 27 (f) Company Income Tax Act Cap C21 LFN 2004

[11] S. 27 (g)&(h) Company Income Tax Act Cap C21 LFN 2004

[12] S. 27 (i) Company Income Tax Act Cap C21 LFN 2004

[13] Western Soudan Exporters v FBIR 1973) ALL NTC Pg. 355

[14] Chief F.R.A. WIllians vs RTB (2012) 6 TLRN 130 at 136

[15] Otis Of NIGERIA LIMITED V FBIR (1976) VOL 2 ALL NTC Pg 127

[16] S.24 Company Income Tax Act Cap C21 LFN 2004

[17] S. 24(a) Company Income Tax Act Cap C21 LFN 2004

[18] S.24(b) Company Income Tax Act Cap C21 LFN 2004

[19] S.24(d)(i)&(ii) Company Income Tax Act, Cap C21 LFN 2004

[20] S. 24(e) Company Income Tax Act, Cap C21 LFN 2004

[21] S.24(f)(i)-(iii) Company Income Tax Act, Cap C21 LFN 2004

[22] S. 85(g) Personal Income Tax Act, Cap P8 LFN 2004 and  S. 24(g) Company Income Tax Act Cap C21 LFN 2004

[23] S. 24(h) Company Income Tax Act Cap C21 LFN 2004

[24] S. 24(I)(i)-(ii) Company Income Tax Act Cap C21 LFN 2004

[25]  S.24(I)(ii) Company Income Tax Act Cap C21 LFN 2004

[26] S.24(I)(iii) Company Income Tax Act Cap C21 LFN 2004

[27] S. 25(1)-(4) Company Income Tax Act Cap C21 LFN 2004

[28] S.25(5) Company Income Tax Act Cap C21 LFN 2004

[29] S.25(6) Company Income Tax Act Cap C21 LFN 2004

[30] S. 25A Company Income Tax Act Cap C21 LFN 2004

[31] S. 25A(3) Company Income Tax Act Cap C21 LFN 2004

[32] S. 26 Company Income Tax Act Cap C21 LFN 2004

[33] S. 11(4) Company Income Tax Act Cap C21 LFN 2004

[34] Ibid foot Note 28 and the case of International Cigarette Company Ltd V FBIR (2000) 1 NRLR at page 52.

[35] Ibid foot Note 29

[36]  Definition of Working Capital Loan www.investopedia.com/terms/w/workingcapitalloan.asp Accessed on 17th October, 2020.

[37] S. 23(2)(ii)(a) Finance Act 2019

[38]  S. 23(2)(ii)(b) Finance Act 2019

[39] Definition of Tax incentive: https://www.collinsdictionary.com/dictionary/english/tax-incentive and  https://en.wikipedia.org/wiki/Tax_incentive accessed on 18th Oct, 2020

[40] S. 24(a) Company Income Tax Act Cap C21 LFN 2004

[41] OANDO PLC V FIRS (2012) VOL 8 ALL NTC P.g 285, reported by Prof  Abiola Sani “A compendium of Nigeria Tax Cases” Pg. 120

[42] S.23(2) ( C) of Finance Act 2019

[43] Paragraph 1 of 7^th Schedule of CITA inserted by Section  S.23(2) ( C) of Finance Act 2019

[44] Paragraph 6 of 7^th Schedule of CITA inserted by Section  S.23(2) ( C) of Finance Act 2019

[45] Paragraph 2 of 7^th Schedule of CITA inserted by Section  S.23(2) ( C) of Finance Act 2019

[46] Paragraph 3 of 7^th Schedule of CITA inserted by Section  S.23(2) ( C) of Finance Act 2019

[47] Paragraph 5 of 7^th Schedule of CITA inserted by Section  S.23(2) ( C) of Finance Act 2019

[48] Western Nigeria Licensed Buying Agents Association v FBIR (1972) Vol 1 ALL NTC Pg 327 reported also by Prof Abiola Sanni “A Compendium of Nigerian Tax Cases” page 30-31

[49] S.11 (1) & Table 1, 3^rd Schedule of CITA Cap C21 LFN 2004

[50] S. 11(2) Company Income Tax Act Cap C21 LFN 2004

[51] S. 11(2)&(3)(a)-(e)Company Income Tax Act Cap C21 LFN 2004

[52] S. 11(5) Company Income Tax Act Cap C21 LFN 2004

[53] Ibid.

[54] https://nigerianstat.gov.ng/pdfuploads/Manufacturing%20sector%202010-2012.pdf accessed on 23/10/2020

[55] S. 23(3)(a) Company Income Tax Act Cap C21 LFN 2004

[56] S. 23(3)(b)&(b) Company Income Tax Act Cap C21 LFN 2004 and  the Railway Loan (international Bank)(Exemption of interest) Notice of 1958 and The income tax (Exemption)(Nigeria Broadcasting Corporation)order of 1957

[57] Deloitte “inside tax: Are tax exemptions available to REITs in Nigeria untapped?” https://www2.deloitte.com/ng/en/pages/tax/articles/inside-tax-articles/are-tax-exemptions-available-to-REITs-in-Nigeria-untapped.html Accessed on 28th Sept, 2020

[58] Northern  Nigeria Investment Ltd v FBIR (1976) 2 FRCR 93, also reported in (1976) NCLR 356

[59] KPMG “Financing arrangements and interest and interest expense deduction” September, 2017 https://home.kpmg/ng/en/home/insights/2017/09/financing-arrangements-and-interest-expense-deduction–finding-t.html Accessed on 27th Oct, 2020

[60] https://treasuryimprovement.ch/beps-action-4-interest-deductions/ Accessed on 27th Oct, 2020