#BounceExclusive: 13 Types Of Income Exempt From Tax
This story is in continuation of Bounce News Tax Thursday series.
In this edition, we shall outline kinds and sources of income that are not chargeable to tax.
Perhaps, you have no idea that some earnings are tax-free or that some persons by the virtue of their positions, do not pay tax.
Here is a list of such incomes that are not taxable. The list is by no means exhaustive.
1. The official emoluments of the President Of The Federal Republic of Nigeria and of any person performing the functions of the President, received by such persons in his capacity.
2. The official emoluments of the governor of a state.
3. Official emoluments of the Vice President and Deputy governor of a state.
4. The income of a local government or government institution.
5. The income of any religious or charitable institution such as churches, mosques, shrines or non-government organisations, NGOs. Such incomes are not taxed because they are not derived from a trade or business carried on by such institutions.
6. Wound and disability pensions, granted to members of the Armed Forces or of any recognized national defence organization, or to persons injured as a result of enemy action.
7. Pensions granted to a person under the provisions of the Pensions Reforms Act relating to widows and orphans.
8. The income of a trade union registered under the Trade Union Act in so far as the income is not derived from a trade or business carried on by that trade union.
9. Gratuities payable to a public officer by the government of the federation or state in respect of services rendered by him.
10. Any compensation for loss of employment.
10. The interest accruing to a person on foreign currency domiciliary accounts.
11. Income earned from outside Nigeria by a temporary guest, lecturer, teacher, nurse, doctor and other professionals, and brought into Nigeria shall be exempt from tax, provided that such an income is deposited in a domiciliary account in an authorized bank in Nigeria.
12. Income from dividend, interest, rent, royalties, fee, and commission earned from abroad and brought into Nigeria shall be exempt from tax, provided that such income is brought in convertible currency and paid into a domiciliary account in a bank approved by the government.
13. Income earned from abroad by an author, sportsman, playwright, musician, artist, and brought into Nigeria is exempt from tax, provided that such income is brought in foreign currencies and paid into a domiciliary account in an authorized bank in Nigeria.
Now you know!