On 20 June 2019, the Tax Appeal Tribunal (TAT), in the case between Nigeria Breweries Plc (Appellant) and Abia State Board of Internal Revenue Service (Respondent), ruled that gratuity is not liable to personal income tax.
In reaching its conclusion, the TAT declared that:
- Section 3 of Personal Income Tax Act 2011, as amended (PITA), which is the charging provision, does not make any specific reference to gratuity as a chargeable income
- Where no provision of PITA subjects gratuity to tax, a schedule cannot be used to amend provisions of the principal Act to achieve the opposite.
- Where there are ambiguities in the tax law, the relevant provisions of such law must be interpreted in favour of the taxpayer.
We will share a detailed analysis of the ruling in our Newsletter in due course.