(1)
There is exempt from tax under chapter two of this Act —
(a)
the profits accruing to, or gains from disposal of assets of any person being —
(i)
a statutory or registered friendly society, where the profits or gains are not derived from a trade or business carried on by such society,
(ii)
a co-operative society registered under any enactment or law relating to co-operative societies, not being profits or gains from any trade or business carried on by that society,
(iii)
engaged in educational, religious or charitable activities of a public character where the profits or gains are not derived from a trade or business carried on by such person,
(iv)
a trade union registered under the Trade Unions Act where the profits or gains are not derived from a trade or business carried on by such trade union,
(v)
a Federal, State or Local Government in Nigeria, their Ministries, Departments and Agencies and other public institutions, other than profits or gains derived from trade or business or any instrumentality established for the purpose of trade or business, and
(vi)
a government purchasing authority established by an enactment and empowered to acquire any commodity for export or redistribution ;
(b)
dividend distributed by authorised collective investment scheme ;
(c)
dividend or rental income received by a real estate investment company on behalf of its shareholders, where not less than 75% of the dividend or rental income is distributed within 12 months after the end of the financial year in which the dividend or rental income was earned, provided that nothing in this subsection shall be construed to exempt a —
(i)
shareholder from tax on the dividend or rental income received from a real estate investment company,
(ii)
real estate investment company from tax on management fee, profits or any other income earned for and on its own account, and
(iii)
real estate investment company from tax on dividend or rental income if it does not meet the conditions stipulated in this paragraph ;
(d)
compensating payments, which qualify as dividends under section(5) (2)(c)of this Act, received by a lender from its approved agent or a borrower in a Regulated Securities Lending Transaction ;
(e)
compensating payments, which qualify as dividends or interest under section (5)(2)(c) of this Act, received by an approved agent from a borrower or lender on behalf of a lender or borrower in a Regulated Securities Lending Transaction ;
(f)
consular fees received on behalf of a foreign State, or by a consular officer on behalf of the State, and the employment income of such officer, other than income in respect of any trade, business, profession or vocation carried on by the officer or in respect of any other employment exercised by him in Nigeria:
Provided that this exemption shall not apply to the income of an employee engaged in domestic duties, or where the officer or employee ordinarily resides in Nigeria and is not a national of the foreign State ;
(g)
an income in respect of which tax is remitted or exempt under the provisions of the Diplomatic Immunities and Privileges Act or of any enactment, order or notice continued in force or effected by that Act ;
(h)
pension funds and assets created under the Pension Reform Act ;
(i)
pension, gratuity or any retirement benefits granted in accordance with the Pension Reform Act ;
(j)
wound and disability pensions granted to members of the armed forces or of any recognised national defence organisation, or to a person injured as a result of enemy action ;
(k)
a sum received by way of death gratuities or as consolidated compensation for death or injuries ;
(l)
subject to the provisions of Part VIII of Chapter Two of this Act, redundancy lump sum payment and other compensation of capital nature for loss of employment ;
(m)
gains accruing from the disposal of assets by an angel investor, venture capitalists, private equity fund, accelerators or incubators with respect to a labelled startup provided the assets have been held in Nigeria for a minimum of 24 months ;
(n)
income earned from bonds issued by a State or the Federal Government of Nigeria ;
(o)
emoluments of any person serving as other rank and other personnel serving in combat zones, hazardous areas or in designated operations, provided that where any other income accrues to the person, not being income by way of personal emoluments, that income shall be liable to tax under Chapter Two of this Act ;
(p)
income generated by companies engaged in agricultural businesses including crop production, livestock, aquaculture, forestry, dairy and such other businesses as described in the Thirteenth Schedule to this Act, for the first five years upon commencement of business ;
(q)
dividend received from investments in wholly export-oriented businesses ;
(r)
profits of a company engaged in sporting activities ;
(s)
dividend, interest, rent or royalty derived from outside Nigeria and brought into Nigeria through approved channels ;
(t)
income of a person from an employment where such person earns gross income of national minimum wage or less from such employment ;
(u)
wages and salaries of military officers.
(2)
The following shall not constitute chargeable gains under Part VIII of Chapter Two of this Act —
(a)
gains accruing to —
(i)
pension funds and assets approved under the Pension Reform Act, and
(ii)
an individual from disposal of investment held as part of any national provident fund or other retirement benefits schemes established under the provisions of any Act or enactment for employees throughout Nigeria ;
(b)
gains on the disposal of a decoration, awarded for valour or gallant conduct which a person acquires otherwise than for consideration in money or money's worth.
(3)
A company shall be entitled to an additional deduction of 50% in the relevant years of assessment in respect of costs incurred in any two calendar years from 2023 to 2025 on the following —
(a)
wage awards, salary increases, transportation allowance or transport subsidy granted to a low-income worker, which bring the gross monthly remuneration of the worker up to an amount not exceeding N100,000
Provided that any additional award or salary increase to an employee earning above N100,000 as monthly salary shall not qualify for the additional deduction under this subsection ; and
(b)
salaries of any new employee constituting a net increase in the average number of new employees hired in 2023 and 2024 calendar years over and above the average net employment in the three preceding years, provided that such new employees are not involuntarily disengaged within a period of three years post-employment.
(4)
In this section —
"net employment" means the total number of persons employed less the total number of persons disengaged during the calendar year, whether such disengagement is voluntary or not.