Tax Appeal Tribunal’s judgement on the taxability of gratuity payments

The Tax Appeal Tribunal (“TAT” or “the Tribunal”) sitting in Enugu State on 20 June 2019 delivered a judgment in favour of Nigerian Breweries Plc (“Nigerian Breweries” or “Appellant”) in a case with Abia State Board of Internal Revenue Service (“ASBIRS” or “Respondent”).

The key issue considered in the case, amongst others, was determining whether gratuity paid by Nigerian Breweries to its employees is subject to Personal Income Tax. In delivering its judgment, the TAT held that section 3 of Personal Income Tax Act 2004, as amended (PITA or the Act), which is the charging provision regardless of the contrary provision in the Third schedule to the Act, does not make any specific reference to gratuity as a chargeable income. As such, the TAT concluded that a schedule to the Principal Act, being a subsidiary legislation, cannot amend any provisions of the Act itself. Please click here to explore the detailed newsletter

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