(i) The two forms of stamp duties are:

 Ad-valorem
These are duties that vary with the amount of consideration and are in accordance with a scale
prescribed by the Act. The Commissioner of Stamp Duties or adjudicator will need to know the
amount involved in the transaction. This will enable him determine the appropriate duty to be paid.
Examples of instruments that are assessed based on ad-valorem basis are:
 Deed of assignment;
 Sales agreement;
 Tenancy or lease agreement;
 Insurance policies;
 Contract agreements;
 Vending agreement;
 Charter-party;
 Contract notes;
 Legal mortgage and debenture loans;
 Share capital of companies; and
 Promissory notes.

 Fixed
Fixed duties
These are duties that do not vary with the consideration for the document being stamped.
Examples of instruments assessed by fixed duties are:
 Power of Attorney (POA);
 Certificate of occupancy (C of O);
 Appointment of receiver;
 Memorandum of understanding (MOU);
 Joint venture agreements (JVA);
 Ordinary agreements and receipts;
 Guarantor forms; and
 Proxy form.

Instruments exempted
Instruments that are specifically exempted are as follows:
 Those relating to agreements between the Federal Government and

other foreign governments;

 Instruments relating to reconstruction and amalgamation; subject to

specified condition under section 104(1) of the Act;

 Transactions and sales of properties of a company under liquidation
arising from a compulsory winding up by a court or creditors‟ voluntary winding up;
 Based on Central Bank circular number CBN/GEN/DMB/02/006 dated

January 15, 2016, titled “Currency and Remittance of Statutory Charges or Receipts to Nigerian
Postal Service under the Stamp Duties Act”, the following transactions are exempted from stamp
duties:
Transactions relating to savings accounts holders, salary

accounts or students savings accounts;

Payments and deposits for self to self-transactions whether inter or intra-bank; and
Payments for goods supplied or services rendered if the amount is under N1,000, payment of salaries
or wages, pensions, gratuities, etc;

 Section 56 of the Finance Act, 2019, exempts the following “exempt

receipts” and “general exemptions” from stamp duties;
Exempt receipts
 Receipts given by any person in a regulated securities lending transaction carried out under
regulations issued by the Securities and Exchange Commission

General exemptions which include the following:

 Shares, stocks or securities transferred by a lender to its

approved agent or a borrower in furtherance of a regulated securities lending transactions;

 Shares stocks or securities returned to a lender or its

Approved agent by a borrower in pursuant to a regulated securities lending transaction; and

 All document relating to a regulating transactions carried Out under regulations issued by the
Securities and Exchange Commission; and
 Share transfer based on FIRS information circular on

“clarifications on the provisions of the Stamp Duties Act” No: 2020/05 dated April 29, 2020.

Objectives of the NTP

The National tax policy provides the fundamental guidelines for the orderly development of the
Nigerian tax system. The policy is expected to achieve the following specific objectives, among
others:
(i) Guide the operation and review of the tax system;

(ii) Provide the basis for future tax legislations and administration;

(iii) Serve as a point of reference for all stakeholders on taxation;

(iv) Provide benchmark on which stakeholders shall be held accountable; and

(v) Provide clarity on the roles and responsibilities of stakeholders in the tax system.

b. The tax system usually involves a tripartite aspect, namely the tax policy, tax laws, and tax
administration.
i. Tax policy

The tax policies are general statements of intention, which guide the thinking and the action of all
concerned towards the realisation of the set goals. They usually include:
 Movement of emphasis from income tax to consumption tax that

is less prone to tax evasion;

 Pursuance of a tax law regime with the aim of reducing Individual tax burden, widening the tax net
and encouraging savings and investments; and
 Introduction of the self-assessment scheme to encourage

taxpayer participation in the tax assessment process, which is considered to be realistic in approach.
The policy can also include movement from coercive method of taxation to voluntary compliance as
in the case of Nigeria in recent time.
ii. Tax laws

The tax laws include the following notable tax legislations in Nigeria:
 Personal Income Tax Act Cap. P8 LFN 2004;
 Companies Income Tax Act Cap. C21 LFN 2004 (as amended);
 Petroleum Industry Act 2021;
 Capital Gains Tax Act Cap. C1 LFN 2004 (as amended);
 Value Added Tax Act Cap. V1 LFN 2004 (as amended);
 Education Tax Act Cap. E4 LFN 2004(as amended);and
 Stamp Duties Act Cap. S8 LFN 2004.

In Nigeria, the Constitution vests the legislation of income tax, whether personal or corporate on the
Federal Government in order to promote uniformity. However, the three tiers of government share
the administration of the various taxes. Tax laws are reviewed periodically in line with the changes in
social, political and economic conditions of the country.
The power to impose tax in Nigeria is within the exclusive legislative authority of the Federal
Government. There are various machineries set up by the government to ensure strict compliance of
these laws; non-compliance attracts penalties and fines.
iii. Tax administration

This involves practical interpretation and application of the tax laws. The bodies charged with the
administration of tax in Nigeria are the Federal, State and Local governments. The tax authorities of
these tiers of government derive their formation from the relevant laws which include:
 The Federal Inland Revenue Service (FIRS), sections 1, 2,

and 3 of the Federal Inland Revenue Establishment Act (FIRSEA) 2007;

 The State Internal Revenue Service (SIRS), sections 87 of Personal Income Tax Act Cap P8
LFN 2004 (as amended); and
 The Local Government Revenue Committee, section 90 of

Personal Income Tax Act Cap P8 LFN 2004 (as amended).

Types of capital allowances are:

(i) Initial allowance (IA)

This is a relief that is granted to a business that has incurred a qualifying capital expenditure in the
basis period of the year or in the year the qualifying expenditure was incurred. Initial allowance is
granted to give an immediate relief from the huge expenditure incurred by the business. Initial
allowance has the following attributes:
 It is claimable only once throughout the useful life of the asset;

 It is determined by applying initial allowance rate on asset‟s cost; and

 Initial allowance is never prorated on account of the basis period being less than twelve months.
However, if the relevant tax authority establishes that the asset has been put to private use, the
amount of initial allowance that will be allowed as a deduction from profit shall be restricted to the
proportion attributable to the business use of the assets.

(ii) Annual allowance (AA)

This relief is granted annually on the residue of qualifying capital expenditure incurred on the
qualifying capital expenditure after deducting initial allowance. Annual allowance has the following

 It is granted annually over the useful life of the asset;

 It is determined by dividing the cost of the assets less initial allowance over the assets useful life,
taking into consideration the specified rates;

 Annual allowance shall be prorated where the basis period of a year of assessment is less than
twelve months;

 Annual allowance is calculated on straight line basis; and

 A book value of N10 shall be deducted from annual allowance claimable in the last year of the
assets life and retained until the asset is disposed off.

Investment allowance
This is an incentive granted to a business that incurred qualifying capital expenditure on plant
and machinery. Investment allowance has the following features:
 It is granted only once in the life of the asset;

 It is granted only on plant and machinery; and

 It is granted at the rate of 10%;

 Initial allowance is never prorated on account of the basis period being less than twelve months.
However, if the relevant tax authority establishes that the asset has been put to private use, the
amount of initial allowance that will be allowed as a deduction from profit shall be restricted to the
proportion attributable to the business use of the assets; and

 It is never used in determining the tax written down value of the asset. In other words, investment
allowance does not impact the tax written down value of the asset. However, it should be added to
other capital allowances i.e. IA and AA, and deducted from assessable profit.

(iv) Balancing adjustments

These shall arise upon the disposal of a qualifying capital expenditure in a year of assessment. The
disposal may result in either:
 Balancing allowance

This is arrived at when the tax written down value of the qualifying capital expenditure is greater
than the sale proceeds at the time of disposal. Balancing allowance shall be added to other capital
allowances that is IA and AA and deducted from assessable profit; or
 Balancing charge

This is arrived at when the tax written down value of a qualifying capital expenditure is less than the
sale proceeds at the time of disposal. Balancing charge being a gain shall be added to assessable
profit. However, since balancing charge is a claw back of capital allowances previously enjoyed on
the disposal asset, the amount to be added back to profit shall not exceed the relief previously
enjoyed. Consequently, the excess of balancing charge being capital gains shall be assessed under the
Capital Gains Tax Act.
(b)

SOLUTION 5
(a) Most often, the terms “e-business” and “e-commerce” are used interchangeably; however, they
are not synonymous. E-commerce refers to buying and selling online, while e-business encompasses
all business conducted online. Therefore, e-commerce can be viewed as a subset of e-business.

Below are the differences E-commerce E- business

between e-commerce and e-
business: S/N
i. E-commerce involves E- business is the conduct of
commercial transactions business process on the
done over the internet. internet.
ii. E-commerce is use of In addition, „e-business‟ also
electronic transmission includes the exchange of
medium that caters for information directly related
buying and selling of to buying and selling of
products and services. products.
iii. Activities that essentially This includes activities like
 involve monetary transaction procurement of raw materials
are termed “e-commerce”. or goods, customer
education, looking for
suppliers, etc.
iv. E-commerce usually requires E-business involves the use
the use of just a website. of CRM‟s, ERP‟s that
connect different business
processes.
E-commerce involves the mandatory use of E-business could involve the use of internet,
the internet. intranet, or extranet.
vi. E-commerce is narrower E-business is a broader
concept and restricted to concept that involves market
buying and selling. surveying, supply chain and
logistics management, and
using data mining.

(b) i. Objectives of tax identification number (TIN)

Tax identification number (TIN) is a unique nine-digit number allocated to taxpayers with a view to
identifying an individual, business or any other entity in tax returns and other documents filed with
the tax authorities.
The major objectives of introducing TIN, as specified in Joint Tax Board Bulletin 2011 include:
 Creating closer linkage between tax authorities in Nigeria;
 Aiding cooperation and information sharing amongst the tax

authorities; and
 Increasing revenue generation accruing to all tiers of the

government.
ii. Items to be contained in returns to be filed by companies to FIRS
Section 55 of the CITA, Cap C21, LFN 2004 (as amended) provides that all companies (including
businesses granted exemption from incorporation) to at least once a year without notice or demand
from the Federal Inland Revenue Service (FIRS), file a return with the FIRS in a prescribed form and
containing prescribed information together with the following documents:
 Audited financial statements;
 Income tax and capital allowance computation schedules;
 Completed copy of Companies Income Tax (Form IR3C-4Coy);
 Completed copy of Tertiary education tax (Form 4D EDT);
 Evidence of payment of companies income tax liability; and
 Evidence of payment of Tertiary education tax liability.

SOLUTION 6
(a) Employment
Employment is an agreement between an employer and an employee that the employee will provide
certain services on the job and in the employer‟s designated workplace to facilitate the
accomplishment of the employer organisation‟s goals and mission, in return for compensation. The
agreement can be verbal, implied or an official employment contract.
In employment, the employer determines where, when, how, why and what of the work that is
performed by the employee. The degree of input, autonomy and self-directedness that an employee
experiences on a job is a by-product of an employer‟s philosophy of management and employment.
Employment ends at the prerogative of the employer or the employee.
Vocation
A vocation is a specified business, occupation, profession, or trade to which a person is specially
drawn or for which he or she is suited, trained or qualified. Vocation can either be an activity that
serves as an individual‟s regular source of livelihood or as an activity engaged in especially as a
means of passing time.
Profession
A profession refers to an occupation that requires specialized education, knowledge, training and
ethics. Although professionals make their living in what they do, this paid work is often more than
just a job or occupation alone. Whether the occupation is law, medicine, plumbing, writing, interior
design or accounting, those who are in it are expected to meet and maintain common standards.
Professions are, ideally, made up of people who should have high ethical standards, special
knowledge and skills. The responsibility of people in certain occupations to the public is an
important distinction from those who may participate in the fields on an amateur or non-professional
basis. For example, if a home owner hires a non-licensed plumber to save money, he or she wouldn‟t
be able to hold this person to the same standards as a licensed professional in the same industry.

(b) Cash emoluments

Cash emoluments are the remuneration that an employee receives from the employer in cash.
Cash emoluments include salary, wages, fee, allowance or other gain or profit from employment,
including compensations, bonuses, premiums, benefits, and share of profits received by an employee.
Benefits–in–kind (BIK)
Benefits-in-kind mean those expenses incurred by an employer in the provision of benefits to the
employee.
Such benefits often include: furnished living accommodation; gardener/stewards (domestic servants),
use of official car for private purposes by employees; installation of air conditioners or generator in
an employee‟s residence, etc.
These benefits are regarded as part of the employee‟s taxable income if these relate to services
rendered by the employee.
Benefits-in-kind will also include such benefits which are usually provided to the spouse, family,
servant, dependent or guest of the employee.
(c) The following are the general rules for quantifying benefits-in-kind on

the use of assets, etc:

i. Use of assets owned acquired by the employer
The employee is deemed to have derived income equal to 5% of the cost of assets if known or 5% of
the market value at the date of acquisition and where the cost is not known, to be determined by the
tax authorities.
Assets rented or hired by the employer
The employee is deemed to have derived an income equal to the annual amount of the rent or hire
expended by the employer on the asset.
Where an employee has made any refund in respect of the asset rented or hired by the employer
for the employee‟s benefit, the employee shall be deemed to have derived income equal to the
difference between the amount incurred by the employer and any amount refunded by the
employee.
ii. Provision of residential accommodation by the employer
If an employer provides residential accommodation for the benefit of an employee anywhere in
Nigeria and the employee pays no rent for the premises, or pays a rent which is less than the annual
value of the premises, the employee is deemed to have derived income each year equal to the annual
rateable value of the premises less any rent paid by the employee.
The annual rateable value of any premises is that value as determined by the relevant tax authority
for purposes of local rate.
iii. Provision of domestic staff by the employer
Where an employer engages the service of domestic staff (such as driver, steward, washman,
housemaid, gardener, etc.) for the exclusive benefit of an employee, the cost incurred in form of
salary by the employer for the use of the domestic staff by the employee shall be deemed as income
in the hands of the employee and taxed accordingly.
The income of a domestic staff shall only be deemed as income in the hands of the employee only
where the domestic staff is not a permanent employee of the employer, that is, a contract staff.
SOLUTION 7
(a) Ultimate beneficiaries of withholding tax
The Companies Income Tax Act and Personal Income Tax Act clearly specify the ultimate
government beneficiary of withholding taxes. These are the state governments through the agency of
the State Internal Revenue Service (SIRS) and the Federal government through the Federal Inland
Revenue Service (FIRS).
Therefore, the administration of withholding tax is within the purview of both the FIRS and the
SIRS.
(b) Contents of WHT returns/payment schedule
Each withholding tax cheque, being paid to the Revenue must be accompanied with a payment
schedule, which is a list of those who suffered the deductions that make up the cheque. The payment
schedule must contain the following particulars:
i. Name of the taxpayers who suffered the deductions;
ii. Their addresses;
iii. The nature of their activities/services and period covered;
iv. Their tax file numbers (now Tax Identification Number (TIN);
v. The total amount payable;
vi. The rate of tax applied;
vii. The amount of tax withheld;
viii. The balance paid to the taxpayer;
ix. The tax contract for which returns were being made;
x. The date of payment; and
xi. The cheque number and date.
(c) Penalty for late remittance and non-deduction of withholding tax from payments
Section 82 of CITA 2004 (as amended) specifies that where any person who being obliged to deduct
any tax under section 78 (deduction of tax from interest, etc), 79 (deduction of tax on rent), 80
(deduction of tax from dividend) or 81 (deduction of tax at source) of this Act fails to deduct or
having deducted fails to pay to the FIRS within 21 days from the date the amount was deducted or
the time the duty to deduct arose, shall be guilty of an offence and shall be liable to a penalty of 10%
per annum of the tax withheld or not remitted, as the case may be.
Similarly, failure to deduct or having deducted, fails to remit to the SIRS within 30 days, withholding
tax withheld from payments due to individuals, shall be guilty of an offence punishable on conviction
and shall be liable to a fine of N5,000, in addition to the tax deductible or deducted, but not remitted,
plus interest at the prevailing commercial rate.
(d) Currency of deduction
The currency in which tax is to be deducted and paid over to the relevant tax authorities is the
currency of transaction. Where the transaction is in foreign currency, the tax is to be withheld in the
foreign currency and paid to the relevant tax authority, through the Central Bank of Nigeria (CBN).
The CBN would then effect the necessary conversion, using the ruling rate of exchange and then
credit the appropriate government account with the sum.

SOLUTION 4
4a. Ethics and the law
Ethics consists of normative standards that guide human actions. These standards are not backed by
sanctions. Law on the other hand has the same function as ethics but has sanction attached for their
violation.
Generally speaking, it is considered unethical to break the law. However, there are some instances in
which people believe that certain laws may be broken on ethical grounds because such laws are
considered to be unethical. For example, the law that requires Germans not to assist Jews during the
Second World War was widely considered to be unethical or immoral.
Another example is that while it is unethical to lie to one‟s employer, it might not be illegal to do so
under certain circumstances.
b. An ethical (moral) dilemma involves a conflict between two moral principles whereby it can be
argued that both perspectives are fair and reasonable. Ethical dilemmas typically arise in situations
whereby a particular action is likely to benefit one stakeholder whilst harming another.
In summary, an ethical dilemma is a situation where guiding moral principles cannot unequivocally
resolve the conflict and determine which course of action is right or wrong. It arises when there is a
difficulty in determining what the morally right or good course of action is.
c. CONSEQUENTIAL THEORIES (TELEOLOGICAL THEORIES) OF ETHICS
Consequential theories of ethics are also known as teleological theories or results-based theory. This
is the theory that “of all the things that a person might do at any given moment, the morally right
action is the one with the best overall consequences”.
According to this view, nothing is inherently „wrong‟: it all depends on the outcomes or
consequences. Whether something is right or wrong depends only on results. This means that faced
with a moral dilemma, an individual should choose the action that will provide the best possible
consequences (or the „least-worst‟ consequences).
Individuals may not think about the consequences of their decisions or actions every time they are
faced with a moral dilemma, because they do not have the time. Instead they might rely on a
generally-accepted view of what is right, based on the normal outcomes from similar situations. For
example, a person may choose not to tell a lie because there is a generally accepted view that telling
lies is „bad‟ based on experience that lying usually has bad consequences.
Utilitarianism
A variant of consequential ethics is utilitarianism. Utilitarianism is the view that the morally correct
decision in any situation is one that produces the best possible outcomes for people (for „mankind‟).
The aim should be to maximise well-being or „utility‟ for people.
Ethical egoism
Another variant of ethical consequentialism is ethical egoism. This takes the view that people should
always do what is in their own best interests, not what is in the best interests of people generally.
Consequential/teleological ethics and the profit motive
Teleological ethics can be used to justify the profit motive in business. It can be argued that when a
business is profitable, many people benefit. Shareholders benefit from higher returns and dividends;
employees benefit from the employment that a profitable business provides; customers benefit from
the goods and services that a profitable business is able to provide (that it would not be able to
provide if it did not make a profit); the general public benefits from the benefits to the economy from
profitable businesses and additional economic activity.
Teleological ethics can also be used to justify actions in business that might otherwise seem morally
„dubious‟ or „wrong‟, such as:
 cutting costs (including making employees redundant);
 down-sizing (which involves making people redundant); and
 doing business in a country with a dubious political system, such as a tyrannical government.

Main criticisms of consequential theories

The main criticisms of the consequential theory of ethics are that:
 It is often difficult to predict in advance what the consequences of a decision or action might be;
and
 It is a theory that can be used to justify acting in self-interest.