Advanced Taxation, read through the examiner's red pen

Anchor on the basis period or transaction date. Periods and events up to 31 December 2025 follow CITA and the Finance Acts; those from 1 January 2026 follow the NTA. The Study Text's own examples do exactly this: a vehicle bought in 2024 keeps its CITA initial allowance, while one bought in March 2026 goes straight-line under the NTA (Modakeke). The May 2026 model answer still charged tertiary education tax for the 2026 year of assessment because its basis period ended in June 2025.

1. Letterhead or memo heading, date, addressee, RE: line. Marking guides award ½ mark each for heading and introduction.
2. One-paragraph introduction tied to the brief.
3. A summary table of results (tax per year of assessment).
4. Narrative answers to the theory parts, one point per mark.
5. Appendices: computations with year of assessment and basis period in every heading; workings numbered.
6. Close with an offer of further clarification and a signature.

1. Equity and fairness
2. Simplicity, certainty and clarity
3. Convenience
4. Low compliance cost
5. Low cost of administration
6. Flexibility
7. Sustainability

Hook: Every Simple Convenience Lowers Long-run Fiscal Strain. Asked for five in Nov 2023.

1. The specific issues or errors, with monetary values
2. The amendment required
3. The justification
4. Assessable and total profit (or income) the taxpayer admits
5. The tax admitted, or that none is payable

Delivered in person, by courier or electronically within 30 days of service.

1. Tax file number
2. Year of assessment
3. Date of the decision appealed
4. Assessable profit disputed
5. Total profit disputed
6. Tax disputed
7. Grounds of appeal, which cannot differ from the grounds of objection

• Mixed-use expenses: allow only the taxable share: deductible expenses × taxable income ÷ total income.
• Waivers: if an allowed liability is later waived or refunded, the amount is income on that day (s.192). A waived capital liability is a chargeable gain.
• Connected persons: anyone under common control, ownership or management; anyone given a guarantee for matching debt; and related parties under the TP Regulations.

1. Owner at the end of the basis period
2. Asset used in the business
3. Priority-sector companies: certificate of acceptance from the Industrial Inspectorate Department
4. VAT, import duty or levy on the asset actually paid
5. Asset used partly for exempt income: pro-rate only if non-taxable income is 10% or more of total income
6. Allowances on priority (EDI) activities only against priority profits
7. No allowance on items already deducted as expenses
8. No allowance on the excess cost of foreign currency bought above the official rate

• Carry forward only, against profits of the same trade, first available year onward, until used. No time limit.
• Never relieve more than the loss.
• Compute the loss on the same basis period as assessable profit.
• No current-year relief (that is for individuals, claimed within 12 months) and no terminal loss relief.
• Order in the computation: assessable profit + chargeable gains − losses b/f − capital allowances = total profit.

If a company pays a dividend when it has no total profit, or a dividend larger than its total profit, the dividend is treated as the total profit and taxed at 30%. Excluded since FA 2019 and in s.9: dividends out of retained earnings already taxed; exempt profits; franked investment income; REIC distributions of rent and dividends.

Before FA 2019: total profit ₦200m, dividend ₦280m → tax 30% × ₦280m = ₦84m. ABC Ltd (2026 text): ₦4.2m dividend, ₦3.6m total profit, ₦600k traced to taxed retained earnings → no dividend tax.

• Turnover-based (s.38 NTAA): where profit is nil, too low or unascertainable, a resident pays on a fair percentage of gross income; a non-resident on its EBIT ÷ revenue margin × Nigerian turnover.
• Deemed distribution (s.10 NTA): a company controlled by five or fewer individuals that does not distribute profits it could have paid may be directed to treat them as distributed, within 3 years of filing audited accounts; LLP profits are always deemed distributed.
• Interim dividends no longer trigger advance CIT (abolished by FA 2019).

• Deduct cost (or TWDV), improvement costs, costs of defending title, disposal costs (valuers, surveyors, lawyers, accountants, adverts) and acquisition costs (stamp duty, conveyancing).
• Part disposal: cost × A ÷ (A + B), A = proceeds of part sold, B = market value of the rest. Maryland: ₦30m × 40 ÷ 75 = ₦16m; gain ₦24m.
• Market value replaces proceeds for non-arm's-length deals, unvaluable consideration, trustees for creditors and inheritances. Use the higher of proceeds and market value on sale; the lower of price paid and market value on purchase.
• Gifts: the donee takes the last arm's-length price, else market value.
• Asset taken for a debt: the creditor's cost cannot exceed market value, and the creditor's gain cannot exceed the gain using the debt as cost (May 2022 pitfall).
• Options: the disposal date is when the option is exercised. Conditional contract: when the condition is met.
• Instalments over 12 months: spread the gain by consideration received each year.
• Bundled bargains: one disposal; apportion the price.

• Income = the gross dividend, arising on the day it becomes payable.
• Dividend received after WHT is franked investment income: final tax, excluded from total profit. On redistribution, the WHT suffered offsets WHT due.
• Scrip or bonus shares: not taxable and no WHT.
• To a non-resident: WHT is final, and neither payer nor recipient can reclaim it.
• Exempt: from authorised collective investment schemes; from wholly export-oriented businesses; foreign dividends brought in through approved channels.
• Old CITA exemptions: dividends out of pioneer profits; dividends on foreign-currency equity of 10%+ for 5 years (agriculture, petrochemicals, LNG) or 3 years (others).

• Interest is Nigerian when the payer is a Nigerian resident or a Nigerian PE. The NTA definition is wide: penal interest, discounts, profit share in non-interest finance, the finance-cost element of a finance lease, FX differences on debt and securities, hedging payments.
• Exempt: foreign interest, royalty and rent brought in through approved channels (CBN or authorised dealers).
• Rent received in advance is spread over the period, up to five years.
• Allowable against rent: rates and land use charge, collection and agency costs, adverts for tenants, repairs, bad debts, interest on loans for the property, insurance, water rate. Not: depreciation, capital costs, appropriations.

• Sale and leaseback: the owner sells an asset and leases it back. It releases cash; if the leaseback is a finance lease the seller keeps claiming allowances, and the instalments are deductible.
• Leveraged lease: three parties: a lender funds most of the asset's price, alongside the lessor and lessee.
• Sales-type lease: a manufacturer or dealer leases its own product, so it recognises a selling profit or loss when the lease starts.
• Sub-lease: the original lessee leases the asset on to a third party, becoming a lessor for that sub-lease while staying a lessee under the head lease.
• Leasing as a business: letting movable property for hire, with or without an option to purchase, covering rentals, operating and finance leases and hire purchase.

• COVID-19 rent concessions (May 2020): a lessee may treat a pandemic rent concession as not being a lease modification, if the new rent is substantially the same or lower, only payments due by 30 June 2021 are reduced, and other terms do not change substantively.
• Interest rate benchmark (IBOR) reform, phase 2: when a lease's reference rate (such as NIBOR) is replaced on an economically equivalent basis, the lessee simply updates the discount rate instead of treating it as a modification; hedge relationships are not discontinued.
• Lessor forgives lease payments: for an operating lease, the lessor remeasures expected credit losses and derecognises the forgiven receivable under IFRS 9; the lessee may recognise a gain equal to the amount forgiven, and the lessor's loss may be deductible.
• Lease term and leasehold improvements: the lease term is the non-cancellable period plus extension options the lessee is reasonably certain to exercise; improvements are depreciated over the shorter of their useful life and the remaining lease term.
• Lease liability in a sale and leaseback (Sept 2022, effective 2024): the seller-lessee measures the lease liability from the lease payments, not the sale proceeds, so it recognises no gain on the right of use it keeps.

1. Through a permanent establishment (fixed base)
2. Through a dependent agent who habitually concludes contracts
3. Supervisory activities lasting more than three months
4. A turnkey project (taxed wholly in Nigeria, never split into "offshore" and local)
5. Professional, consultancy, management or technical services in Nigeria
6. Dividends, interest, rent and royalties (WHT is the final tax)
7. A contract awarded to a Nigerian company and subcontracted to it
8. Significant economic presence, including digital services (see next section)
9. Transactions with connected persons not at arm's length (adjusted)

• Codifies how treaties, including tax treaties, are interpreted, giving courts a uniform approach
• Sets operational rules for drafting, defining, amending and interpreting treaties
• Pacta sunt servanda: every treaty in force binds the parties and must be performed in good faith (art. 26)
• A state cannot use its internal law to excuse non-performance (art. 27)
• Interpretation in good faith, by ordinary meaning, in context and in light of object and purpose (art. 31); supplementary means (art. 32)
• Supports dispute resolution through negotiation, mediation, arbitration and MAP

1. Tax Nigeria's fair share of the economic activity done here, including with related persons
2. Give the authority tools against over- and under-pricing
3. Reduce economic double taxation
4. A level field between MNEs and independent firms
5. Certainty for taxpayers

• Sale and purchase of goods and services
• Sale, purchase or lease of tangible assets
• Transfer, licence or use of intangibles
• Provision of services
• Lending and borrowing
• Manufacturing arrangements
• Anything else affecting profit or loss

Commenced 12 March 2018 (2012 Regulations from 2 August 2012). The Study Text cites documentation for connected transactions of ₦300m or more a year.

Declaration form (by 30 June, for the previous year): reporting entity; immediate parent; directors; major shareholders and related parties; ownership structure; subsidiaries and connected persons; external auditors; tax consultant; company secretary; declarant; declaration.

Disclosure form (by 30 September): reporting entity; income from controlled transactions; costs of controlled transactions; summary of transactions with connected persons; TP method and documentation; basic financials of the entity and group; declarant; declaration.

Also: TP policy (group or local, forward-looking) and a TP compliance report. The burden of proving arm's length is on the taxpayer.

1. Digital economy: identify how digital business defeats existing rules and develop options covering direct and indirect tax (now Pillars One and Two).
2. Hybrid mismatches: neutralise instruments and entities treated differently by two countries, which give double non-taxation, double deductions or long deferral.
3. CFC rules: strengthen controlled foreign company rules so profits parked in low-tax subsidiaries are taxed in the parent's country.
4. Interest deductions: limit excessive interest on related- and third-party debt (the source of Nigeria's 30% of EBITDA cap).
5. Harmful tax practices: require substantial activity for preferential regimes and exchange rulings spontaneously.
6. Treaty abuse: model treaty provisions and domestic rules to deny treaty benefits in inappropriate cases such as treaty shopping.
7. Artificial avoidance of PE status: widen the PE definition to catch commissionaire arrangements and split activities.
8. TP – intangibles: align returns from intangibles with where value is created.
9. TP – risks and capital: stop profit following risks or capital allocated by contract alone.
10. TP – other high-risk transactions: recharacterise transactions independents would not undertake; guidance on profit splits and management fees.
11. Measuring BEPS: collect and analyse data on its scale and on the effect of the actions.
12. Mandatory disclosure: require taxpayers and advisers to disclose aggressive tax planning arrangements.
13. TP documentation and CbCR: master file, local file and country-by-country report to give tax authorities a full picture.
14. Dispute resolution: make mutual agreement procedures faster and more effective.
15. Multilateral instrument: one convention that amends many bilateral treaties at once to apply the treaty-related actions.

• No or only nominal tax on the relevant income
• Laws or practices that block effective exchange of information
• Lack of transparency in legislative, legal or administrative provisions
• No requirement for substantial local activity

Types: primary, semi and conduit havens. Uses: personal residency, corporate residency, asset holding through trusts and companies.

Treaty signed in Lagos on 25 May 1975. Aims: suppress customs duties, create a CET, harmonise economic and financial policies, form a monetary zone. CET adopted 25 October 2013 with five bands (0% essential social goods, 5% primary necessities and raw materials, 10% intermediate goods, 20% final consumer goods, 35% specific goods for economic development) on the HS 2012 nomenclature.

Trade defence measures (pitfall May 2024): safeguard measures; anti-dumping measures; anti-subsidy and countervailing measures; supplementary protection measures.

55 countries. Objectives: a single continental market, more intra-African trade, competitiveness, integration, sustainable development. Runs through protocols (goods, services, dispute settlement), instruments (rules of origin, tariff concessions, a non-tariff-barrier reporting tool) and institutions (Assembly, Council of Ministers, Committee of Senior Trade Officials, technical committees).

Challenges: lost tariff revenue, adjustment costs, competition for small firms, implementation, non-tariff barriers, infrastructure, institutional capacity. Against ECOWAS in trade in goods (pitfall May 2021): AfCFTA is a continental free trade area liberalising tariffs under rules of origin; ECOWAS is a customs union with a CET and its own trade liberalisation scheme.

An OECD and UNDP initiative that builds audit capacity in developing countries. Serving or recently retired audit experts work alongside local officials on live audits, including TP and sector cases. The host country leads and sets the scope; experts never replace local staff.

A relationship between the revenue authority and, usually, a large taxpayer based on trust, transparency and mutual understanding. The taxpayer runs a sound tax control framework and discloses risks early; the authority gives timely, certain responses. Result: fewer disputes, lower costs, earlier certainty.

Two or more countries examine the same taxpayer at the same time, each independently, and exchange information. It encourages compliance, exposes evasion and fosters cooperation, but needs careful coordination, protects confidentiality and copes with complex laws. Joint audits go a step further.

No poverty · Zero hunger · Good health and well-being · Quality education · Gender equality · Clean water and sanitation · Affordable and clean energy · Decent work and economic growth · Industry, innovation and infrastructure · Reduced inequalities · Sustainable cities and communities · Responsible consumption and production · Climate action · Life below water · Life on land · Peace, justice and strong institutions · Partnerships for the goals.

Principles: intergenerational equity and environmental stewardship. Achieved through renewable energy, sustainable agriculture and responsible consumption. A fourth taxation strategy is tax transparency, so taxes are seen to fund development.

UNDP Tax for SDGs (2021): helps countries use tax to mobilise domestic resources; offers an SDG taxation framework and assessment tool and an annual Tax for SDGs Dialogue; runs TIWB with the OECD (over $2bn extra revenue raised since 2015); covered 25 countries in 2022. Expected results: more domestic revenue, stronger administration against evasion and illicit flows, tax policy aligned with the SDGs, digitalised tax services and gender-equal outcomes.

Need: risk management, long-term sustainability, stakeholder expectations, regulation (NESREA, NUPRC, NEITI) and brand value.

Environmental compliance: environmental impact assessments, waste management, oil-spill response plans, biodiversity protection. Social: community engagement, livelihood restoration with fair compensation, social investment, cultural heritage protection. Governance: transparency, anti-corruption policies, board oversight.

Benefits of sustainable practice: reputation, cost savings, innovation, risk management, access to capital, talent, avoiding "greenwashing". Challenges: high initial cost, complex supply chains, varied regulation, aligning stakeholders, measuring impact, short- vs long-term pressure. Best practice: adopt EITI and IFC Performance Standards, strategic planning, stakeholder engagement, technology, partnerships, continuous monitoring.

History: Carson's Silent Spring (1962); socially responsible investing (1970s); Brundtland definition of sustainable development (1987); Rio Earth Summit (1992); Elkington's triple bottom line (1994); GRI (1997); "Who Cares Wins" coins ESG (2004); UN PRI (2006); SASB standards (2010s); ISSB's IFRS S1 and S2 (2023).

Concessions: no commencement or cessation rules; assets deemed transferred at residue the day after transfer; no VAT and no gain on transfers between related parties.

Conditions (FA 2019, CITA s.29(9)): related for at least one year before the reorganisation; no disposal of the assets for one year after; breach revokes the concessions.

• No merger, takeover, transfer or restructuring may go ahead without the authority's consent or direction.
• Clearance of all taxes due, including on gains, must be obtained first.
• The authority may give directions, including security for tax.

Basis periods: a merger is neither commencement nor cessation, so preceding year basis continues; a brand-new surviving company starts its first period from commencement. Upstream petroleum: the acquirer's period starts on the transfer date.

• Merger: the assets, liabilities and businesses of two or more companies are vested in one company, which may or may not be one of them.
• Acquisition: one company buys all or most of another's equity; above 50%, the target becomes its subsidiary.
• Horizontal merger: companies in the same line of business (Chartered Bank and IBTC became Stanbic IBTC).
• Vertical merger: a supplier and its customer in the same industry (a soft-drink maker and a bottle maker).

• FCCPC: the main M&A regulator under the Federal Competition and Consumer Protection Act; reviews competition effects.
• SEC: deals involving public companies: fairness, transparency, investor protection; annual, quarterly and material-event filings.
• CAC: annual returns and notices of changes in directors and shareholding.
• CBN and NAICOM: approve deals in banking and insurance.
• Tax authorities (NRS, State IRS, FCT-IRS): notify any change in particulars within 30 days (s.9 NTAA) and obtain clearance.

• Timing of asset purchases, disposals and capital allowance claims.
• Hiring instead of buying assets: the full hire charge is deductible.
• Specific rather than general provisions, so they are deductible.
• PAYE and WHT deducted correctly, to avoid penalties.
• Critical dates: returns, objections, PAYE, WHT, VAT, NSITF.
• Gains: use reinvestment reliefs and exemption thresholds.
• Incentives and exemptions: economic development credit, free zones, agricultural exemption, NTA Chapter 8 exemptions, government bonds.
• Remuneration structure and benefits in kind.

• Mandatory disclosure (s.30): anyone entering a transaction whose main purpose is a tax advantage must disclose it. A tax advantage includes a relief, a repayment, avoiding or reducing a charge or assessment, deferring payment, or avoiding a duty to deduct tax.
• Artificial transactions (s.46): the authority may disregard artificial or fictitious transactions; deals between connected persons not on arm's-length terms are deemed artificial.
• Prohibited avoidance arrangements (s.47): a general rule. Where the main purpose is a tax benefit contrary to the law's object, the authority may adjust, disregard or recharacterise the arrangement.
• Specific vs general rules: specific rules are certain and easy to amend but make the law complex and invite new loopholes; general rules are fewer and catch future schemes but are vague and depend on officials' discretion.
• Case law: Lord Clyde in Ayrshire Pullman v CIR (no one must arrange affairs to give the Revenue "the largest possible shovel"); Belgore CJ in FBIR v American International Insurance Co ("Tax is an obligation, not a duty").

Legal requirement: under ICAN's code, a chartered accountant in public practice must not engage in any business or activity that impairs, or might impair, integrity, objectivity or the profession's reputation. A practitioner acting for reward must be accredited as a tax practitioner (NTP; JRB guidance on accreditation).

Engagement: client's appointment letter → engagement letter (scope, deliverables, fees) → introduction letter to the tax office.

Risks: lack of expertise, lack of attention to detail, poor documentation, unpredictable income, technology and cyber risk, liability for wrong advice.

Benefits: own schedule, financial upside, choice of clients, your own vision.

Mitigation: work only within competence; quality control and review; documented filing positions; engagement letters; professional indemnity insurance; continuing education; regular updates to strategy as laws change.

From the client: certificate of incorporation, CAC forms (status report, allotment, registered office), memorandum and articles, TIN and registration evidence, audited accounts, prior tax computations, assessments, receipts, WHT credit notes and tax clearance certificates.

Kept by the consultant: engagement letter, permanent file of client details, correspondence with the tax office, computations and working papers, objections and appeals history, payment and clearance records.

Disclosure to third parties only with client consent, when required by law (court order, tax authority notice), in a professional duty (disciplinary or quality review, defending yourself), or in the public interest (fraud, money laundering).

Stages: selection → preliminary review of the file (ratios: liquidity, efficiency, gearing, profitability) → notification → pre-audit meeting → field audit → interim reports → post-audit review → reconciliation meetings → final report and additional assessments → objections.

Objectives: confirm returns are correct, enforce compliance, detect under-declaration, educate taxpayers, refer frauds for investigation, deter non-filing.

NRS document schedule (pitfall Nov 2023): audited accounts, management accounts, chart of accounts, trial balances, general ledger, fixed asset register, staff and payroll lists, WHT and VAT schedules with receipts, contracts and agreements, bank statements, prior computations and assessments, TP documentation.

Pre-investigation meeting (Nov 2024): explain the purpose, confirm background facts, agree the scope and timetable, request documents, hear the taxpayer's side, seek cooperation.

Stages: surveillance → notification → evidential audit → case preparation → arraignment; terminated if evidence is thin or no crime is shown.

Back duty (Nov 2021, May 2025): an audit of past returns where errors, omissions or deliberate understatement are suspected; covers up to 6 years, unlimited for fraud; records re-examined and tax recomputed; shortfall assessed with penalty and interest; objection and appeal rights apply.

Powers: notices to file, attend, produce books and give access; distraint (goods held 14 days before sale; land only with a High Court order); search and seizure on reasonable suspicion.

IESBA fundamental principles: integrity, objectivity, professional competence and due care, confidentiality, professional behaviour.

Threats: self-interest, self-review, advocacy, familiarity, intimidation. Safeguards: from the profession or legislation (education, CPD, disciplinary regimes, reviews), from the firm (quality control, rotation, independent review, fee policies) and in the engagement (second partner review, declining work, documenting judgements).

Punitive measures (May 2022): ICAN disciplinary tribunal (reprimand, suspension, expulsion), penalties under the tax laws for aiding offences, criminal prosecution.

Deferred tax arises from temporary differences, mostly carrying amount vs tax written-down value.

• Deferred tax liability = (carrying amount − TWDV) × 30%
• Deferred tax asset = (TWDV − carrying amount) × 30%
• Charge in profit or loss = current CIT + development levy ± prior-year adjustments + movement in deferred tax

Compute depreciation correctly before anything else: the 2022 report says that is exactly where candidates failed. Disclose current and deferred tax separately; misleading disclosure risks penalties, qualified opinions and reputational damage.

• Self-interest: a financial or other interest improperly influences judgement, such as undue dependence on one client's fees.
• Self-review: the accountant will not properly evaluate their own, or their firm's, earlier work.
• Advocacy: promoting a client's position so far that objectivity is lost.
• Familiarity: a long or close relationship makes the accountant too sympathetic or too accepting.
• Intimidation: actual or perceived pressure deters objective action.

Conflicts of interest arise when two clients' interests conflict on a matter, or the practitioner's own interest conflicts with a client's. Identify, disclose, get consent or decline, and document.

1. Become aware (see it, but do not go looking for it).
2. Understand the matter and the law involved.
3. Raise it with management or those charged with governance.
4. Assess their response.
5. Decide further action: report to an appropriate authority or withdraw from the engagement.
6. Document the matter, discussions and decisions.

Employed accountants first follow internal protocols, escalating above a superior who is involved; senior accountants carry wider duties. Sanctions for breaches include fines, reprimand, suspension, expulsion and withdrawal of the practising licence.

• Lawful, fair and transparent processing with informed consent.
• Purpose limitation and data minimisation.
• Accuracy and storage limitation.
• Confidentiality and integrity: protection by design, impact assessments for high-risk processing, breach notification.
• Data subjects' rights to information, access and rectification.
• Oversight: the Nigeria Data Protection Commission registers major controllers and imposes penalties.

• Cloud tax platforms: no servers to buy or maintain; access anywhere.
• AI and robotic process automation: collate and analyse data faster with fewer errors.
• Blockchain: tamper-proof transaction records.
• Benefits to taxpayers: easier compliance, lower cost, efficiency, compliance without physical contact.
• Challenges: poor connectivity and power, cybersecurity fears, digital-skills gaps, cost, systems not flexible enough for changing laws.
• Objections may now be served by courier or electronically (FA 2019 and 2020; NTAA 2025).

• HT rate (s.72): 30% for petroleum mining leases (PML), onshore and shallow water; 15% for petroleum prospecting licences (PPL) and marginal fields.
• CIT: 30% on all upstream operations, plus development levy 4% of assessable profit.
• PPT (unconverted): 85% of chargeable profit; 65.75% for up to 5 years before pre-production costs are amortised.
• Deep offshore (water deeper than 200m): no HT, CIT only. Frontier acreage: no HT until reclassified.
• HT is charged only on crude oil, field condensates and NGLs from associated gas upstream of the measurement point, plus balancing charges. Not on associated gas itself or non-associated gas and its liquids.

• 18-month window from 16 August 2021 for voluntary conversion; conversion is automatic on expiry (Opobo: OML expired 31 Dec 2022, PML from 1 Jan 2023).
• Year of conversion: PPT from 1 January to the conversion date, PIA after it.
• Mixed licences: one return with three computations (PPT, HT, CIT).
• PPT losses and unrecouped allowances carry into HT and CIT; investment tax credit does not.
• Accounting period is the calendar year; the first starts on the first sale or bulk disposal. HT is on actual year basis, paid in 12 monthly estimates from March with a 13th balancing payment within 21 days of assessment.

1. A gross revenue × 65% = maximum: 2,383,740 × 65% = 1,549,431
2. B total eligible costs = operating costs + allowances for the year + allowances b/f: 1,277,140 + 1,487 + 480 = 1,279,107
3. C1 exempt costs (royalty, environmental remediation, NDDC, host community, concession rentals) = 404,350
4. Costs subject to CPR = B − C1 = 874,757
5. C2 = lower of (B − C1) and A = 874,757
6. D allowable = C1 + C2 = 1,279,107 → no restriction here; any excess (B − D) is carried forward, and lost if operations end

Upstream allowances: plant, pipeline, building and drilling QCE at 20% a year for four years and 19% in year five, keeping 1%. Petroleum rights: 20% a year. HT computes allowances per field; CIT aggregates them. Losses for HT stay within their class: Class A (PML) or Class B (PPL); for CIT they are pooled across upstream terrains.

1. Tax holiday of 3 years, renewable for 2; dividends in the holiday free of WHT
2. Retention of part of export earnings in a domiciliary account
3. Customs and import duty exemption on mining plant (duty due if sold locally)
4. Free transfer of foreign currency for certified loans and capital repatriation
5. Expatriate remittance quota free of tax
6. Accelerated allowance on mining expenditure: 95%, 5% retained (old CITA)
7. Investment allowance 10% on plant (ended 31 Aug 2023)
8. Approved infrastructure capitalised at 95% in year one, plus possible rural investment allowance
9. 5% annual indexation of unused allowances (for early mines; later case by case)
10. Royalty deferral with FEC approval
11. Environmental and closure reserves deductible when spent and certified

Possession and purchase (May 2025). s.93: no one may possess a mineral unless it was won from their own title area, they hold a permit to possess or purchase, or they are an authorised agent or employee of such a person. s.94: no purchase without a licence to purchase minerals. s.95: small-scale lease output must be sold to a licensed mineral buying centre with receipts. s.96: buying centres keep records of purchases, sales and the source mine. s.92 exempts genuine specimens.

Fees (Nov 2025). Application fees and an annual service fee per cadastral unit. If unpaid, the Mining Cadastre Office gives 30 days' written notice, then records the default and revokes the title.

Priority of land (Nov 2025). Mining has priority over other land uses and is an overriding public interest under the Land Use Act. Where a lease is granted over land with an existing right of occupancy, the State Governor revokes that right within 60 days.