EXEMPTION OF DIVIDENDS DISTRIBUTED FROM RETAINED EARNINGS AND TAXEXEMPT INCOME FROM EXCESS DIVIDEND TAX: RECENT DECISIONS OF THE TAX APPEAL TRIBUNAL AND REGULATORY CLARIFICATIONS OF THE FEDERAL INLAND REVENUE SERVICE (FIRS)

ABSTRACT

This article delves into the complexities of dividend taxation in Nigeria, focusing on the impact of recent legislative amendments and administrative interpretations. Specifically, it examines the historical application of Excess Dividend Tax (EDT) and the subsequent changes introduced by the Finance Act 2019. The article critically analyses the Federal Inland Revenue Service’s interpretation of these amendments as outlined in the FIRS Information Circular 2020/04. By comparing the legislative intent with the FIRS’s administrative stance, the article highlights potential inconsistencies and the resulting uncertainty for taxpayers. It further explores the implications of recent Tax Appeal Tribunal decisions, which have introduced new interpretations of the law. The article concludes by providing recommendations for taxpayers and policymakers to navigate this evolving landscape and ensure compliance with the evolving tax laws.

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UNILAG Law Review, (2024) Volume 7 Edition 1.